Foreclosure auctions are public sales orchestrated by lenders to recover losses on defaulted mortgages. The process unfolds after a borrower fails to meet mortgage payments, leading the lender to foreclose on the property. Judicial auctions involve court supervision, while non-judicial auctions bypass the court system.

Auctions are conducted in public settings, often at county courthouses. Bidding starts with the lender's opening bid, usually the outstanding loan amount plus fees. The highest bidder becomes the new owner, acquiring a deed to the property.

Foreclosure auctions offer ways for investors and home buyers to acquire properties at prices below market value, allowing buyers to build equity swiftly. The diversity of properties at auctions gives buyers a broad spectrum of investment options. Moreover, the expedited nature of foreclosure auctions facilitates quicker transactions than conventional real estate processes.

However, participants must approach foreclosure auctions with careful consideration. Before engaging in an auction, due diligence is imperative, requiring research into a property's condition, liens, and potential legal issues.