credit bid

A credit bid is a way for a lender, like a bank, to take ownership of a property during a foreclosure auction by offering the amount of the debt owed, instead of paying cash. Instead of bidding money, the lender "bids" the value of what the borrower owes on the loan—in effect, using the debt as a bid. If successful, this allows the lender to acquire the property without additional cash, helping recover their losses. It’s a legal process that streamlines foreclosures when the borrower defaults.