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About: Penny auction (foreclosure)     Goto   Sponge   NotDistinct   Permalink

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A penny auction is a collective action taken during the auction of a foreclosed property to force the sale of the property at a low price, with the intent of then returning the property to its previous owner. The process—usually achieved with a combination of intimidation, threats, and physical force—effectively circumvents foreclosure by forcing the lender to relinquish the property without an opportunity to recuperate the balance of the loan.