What happens if one bank starts a foreclosure then sells to another bank before foreclosure is complete?

Generally speaking, when one bank purchases another bank’s accounts, even those associated with mortgages, the purchasing bank is said to “step into the shoes” of the bank that originally owned the accounts.  That means that the purchasing bank has all the same rights in those accounts that the original bank had.  If a foreclosure is ongoing when this sale happens, then the purchasing bank simply makes a court motion to be substituted as a party to the lawsuit, and the matter goes forward.  Make note, though, that in many recent foreclosures during the recession, banks purchasing foreclosure accounts have been known to make mistakes handling the new files that could affect the validity of their actions as plaintiffs in the foreclosure – in other words, these banks sometimes make such mistakes in calculating what you owe and in providing timely notices that could help your foreclosure case.  Your attorney should be able to advise you more specifically how the purchase of the note will affect your case in your state.

Talk to a Foreclosure Defense Attorney to find out what legal rights you have in this situation.