Legal Question in Real Estate Law in New Jersey

If by "auction", you mean a sheriff's sale, it would not do you any good to approach the lender's attorney before the sale. The final order of foreclosure will have directed that the property be sold by the sheriff at auction. If you bid at auction, keep in mind that the foreclosing lender can bid in any part of its judgment without actually coming up with the cash. And, it is in the lender's best interest to outbid every offer up to what the lender thinks the property will later net from a sale at market. Also keep in mind that most sheriff's sales are subject to the foreclosed mortgage. So, if the property is bought by anyone else but the lender, that mortgage debt must be paid by the buyer in addition to the amount of the bid. In today's market, a common result is that the foreclosing lender is the only bidder because the lender must bid to defend its security interest and no one else can bid economically.

You may, however, find it helpful to approach the lender or its attorney immediately after the sale assuming that the lender has bid successfully. At that time, the lender will be interested in selling at market value and may entertain a low offer if it can make a sale without additional costs and commissions.

See also: http://info.corbettlaw.net/lawguru.htm