The Foreclosure Auction - If a property buyer cannot purchase the home from the defaulting borrower during the reinstatement period, the house will go to either a judicial court foreclosure sale or a nonjudicial trustee's sale.

The advantage of buying properties at foreclosure auctions are that any junior liens cancel out. Example: if a house has a first, second and third mortgage, plus a judgment lien and a mechanic's lien, they will all be cancelled out when the first mortgage lender holds a foreclosure sale.

The disadvantage of buying at a foreclosure auction is that cashier's checks are required either at the sale or thereafter. This is one place you can't use your credit cards.

Having to raising cash to bid at a foreclosure sale can be effect your bank accounts, especially you seek a home and the amount of the defaulted mortgage exceeds $100,000.

Always remember that real estate foreclosure auctions are "as is". There isn't an opportunity to inspect the house before the purchase and the foreclosing lender(s) will not pay for repairs. In most states, foreclosure-sale sellers are not required to disclose even known defects at the auction.