My understanding is that the property goes to the highest bidder. Remember this is a legal action by the municipality and I believe its roots are in reducing urban blight. They want someone in the house or at least taking care of the property.
To that end, the banks will send a rep to ensure at least a minimum bid is placed. I read about houses in NJ going back to the bank for the minimum bid of $500! This case is interesting because it looks like we are seeing a floor for what banks are willing to pay hold on to properties.
Looks like auctions will be the place for bargain hunters. Just be prepared to go to a few of them in an area to get a feeling for what the price floor is. And who knows, if the bank rep calls in sick that day you may get a house for $500!
