Lender Confirmation Auction

DEFINITION of 'Lender Confirmation Auction'

A type of foreclosure auction where the highest bid must be approved and accepted by the lender (usually the bank). Lender confirmation auctions are opposed to an absolute auction, where the winning bid gets the property. The property is typically advertised as "subject to lender confirmation." The sale is still conducted as an auction wherein interested parties bid on the property, but the sale does not automatically go to the highest bidder.

BREAKING DOWN 'Lender Confirmation Auction'

Short sales are another type of real estate sale where a bid for offer is subject to lender confirmation or approval. A short sale, however, is conducted similarly to a traditional home sale, without an auction. A lender confirmation auction is conducted when the lender pursues a foreclosure but will not agree to a bid price that falls below its reserve price.

RELATED TERMS
  1. Absolute Auction

    A type of auction where the sale is awarded to the highest bidder. ...
  2. Reverse Auction

    A type of auction in which sellers bid for the prices at which ...
  3. Reserve Price

    A minimum dollar amount that the owner of an item up for auction ...
  4. Dutch Auction

    1. A public offering auction structure in which the price of ...
  5. Auction

    A system where potential buyers place competitive bids on assets ...
  6. Chandelier Bid

    A bid that is announced by an auctioneer during an auction that ...
Related Articles
  1. Personal Finance

    Should You Buy A House At Auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  2. Personal Finance

    Should You Buy A House At Auction?

    In theory, many of the best properties are auctioned. But auctioned properties aren’t always hidden gems.
  3. Markets

    Explaining Dutch Auction

    A Dutch auction is a public offering auction.
  4. Personal Finance

    eBay vs. DealDash: Comparing Auction Sites (EBAY, PYPL)

    Learn how the bidding process works at DealDash and eBay, and discover the potential pitfalls when making bids at these auction sites.
  5. Investing

    Auction Rate Securities: Bidding On The Long Run

    These investments do better with a long-term horizon. Should you buy them before they're going, going, gone?
  6. Markets

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
  7. Entrepreneurship & Small Business

    3 Reasons To Buy Government Surplus for Your Small Business

    Learn why it's wise to access government surplus auctions to buy furnishings, equipment and other items to start a new business or expand an existing business.
  8. Financial Advisor

    Helping Clients Navigate Short Sales And Foreclosures

    Both buyers and sellers can benefit from a real estate professional experienced in dealing with short sales and foreclosures.
  9. Personal Finance

    Foreclose On High Housing Prices

    Foreclosed homes may be financially appealing, but there are many obstacles to consider before buying.
  10. Personal Finance

    Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.
RELATED FAQS
  1. What's the difference between short sales and foreclosures?

    Understand the difference between a short sale and a foreclosure; both result in the loss of a home, either through a sale ... Read Answer >>
  2. What are the maturity terms for Treasury bonds?

    Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >>
  3. What factors should I consider when shopping for the best mortgage lender?

    Comparing lenders to obtain the best mortgage loan requires research and willingness to shop around for the best loan to ... Read Answer >>
  4. What does it mean when my broker says that shares are for auction?

    An auction market is one in which stock buyers enter competitive bids and stock sellers enter competitive offers at the same ... Read Answer >>
  5. Does inflation favor lenders or borrowers?

    Find out under what circumstances inflation benefits borrowers more than lenders and in which situations inflation can be ... Read Answer >>
  6. What is foreclosure investing?

    Foreclosure investing involves the purchase of houses that are somewhere in the process of being confiscated by lenders due ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center