NO BID
No Bid is a term used in real estate to describe a decision by the Veterans Administration (VA) to pay the guarantee amount to the lender instead of acquiring the property in foreclosure when a loan it has guaranteed goes into default.
The result is that often the lender obtains the property at the sale.
The VA guarantees 60% of the loan amount or a fixed amount, whichever is less, to the lender in the event of a default by the borrower. If the lender forecloses on the property and sells it, the VA will pay the lender the guaranteed amount. However, if the VA determines that it would be more cost-effective to pay the guarantee amount to the lender instead of acquiring the property in foreclosure, it will do so.
In summary, No Bid is a decision by the Veterans Administration to pay the guarantee amount to the lender instead of acquiring the property in foreclosure when a loan it has guaranteed goes into default. The VA guarantees 60% of the loan amount or a fixed amount, whichever is less, to the lender in the event of a default by the borrower. If the VA determines that it would be more cost-effective to pay the guarantee amount to the lender instead of acquiring the property in foreclosure, it will do so.
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