Dictionary of Real Estate Terms: no bid
no bid
decision by the Veterans Administration, when a loan it has guaranteed goes into default, to pay the guarantee amount to the lender instead of acquiring the property in foreclosure. The result is that often the lender obtains the property at the sale.
Example: A VA no bid is usually a losing proposition for a lender holding the loan. The VA resorts to the practice when it determines the property has declined enough in value to make paying the guarantee the less expensive alternative. This leaves the lender to look to the property to cover its losses on the loan in excess of the VA contribution.
