What is an upset bid in a foreclosure?

An upset bid in a Hawaii foreclosure is a legal process to increase the sale price of a foreclosed property. When the foreclosure sale is held, the first bidder is typically the lender who holds the mortgage on the property. This initial bid is often the amount of the mortgage that’s owed. Other bidders have the right to place a higher bid, but must do so before a certain deadline. This higher bid is called an “upset bid”, and if accepted, replaces the original bid and increases the amount of the sale. By placing an upset bid, one can become the highest bidder and be awarded the property. To make an upset bid in a Hawaii foreclosure, one must have already entered into the foreclosure auction, and then submit a written bid to the court that is higher than the existing highest bid. The court will then set a hearing date where the bidders can compete against each other. The highest bidder’s offer will then become the new sale price of the property. In order to place an upset bid, one must have the resources to pay the higher bid amount. Furthermore, if the property is sold for an amount that’s lower than the original amount owed, the lender may still attempt to collect the difference from the prior owner.

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