International Institute of Culinary Arts founder and president George Karousos will see a portion of his Abbey Grill on bank foreclosure list and his liquor license auction off on July 9 in Massachusetts.

Karousos filed a Chapter 7 bankruptcy protection last March. According to records, he owed back taxes amounting to $425,000 and about 60 creditors are seeking $743,000 from Karousos for unpaid services and breaches of contract. According to U.S. Bankruptcy Court Attorney Warren Agin, bidders will be allowed to enter early the auction venue, which is the former Congregational Church.

The auction of the property on bank foreclosure list excludes the Abbey Grill real property. The $1.6 million mortgage loan on the property is owned by Millenium BCPbank.

Karousos’ bankruptcy filing listed $2.2 million in total assets and debts of $2.89 million. Agin pointed out that the assets could be lower and the debts higher.

Karousos placed the value of Abbey Grill and Great Hall to be around $1.7 million, with personal property assets lower than $500,000.

Millenium has reportedly hired a construction firm based in Medford to assess the repair cost for the Abbey Grill. The structure is said to be in dire need of exterior repair where loose bricks fell early last year.

The bank foreclosure list auction includes a kitchen, 6-foot water fountain, bar fixtures, bakery and bar equipment, such as ranges and grills, granite-top tables, appliances, ovens and a music system.

Among the personal property of Karousos not included on the auction are a Hook and Hastings circa-1897 pipe organ valued at $150,000 and the 2006 Subaru Forester with a listed value of $11,065.

Meanwhile, the breaches of contract claims were made by people who are planning to hold events at the property of master chef Karousos. Agin said that many have filed claims against Karousos’ company for refund of deposits and lost money.

The U.S. bankruptcy code stipulated that consumers’ claims should be paid before tax claims. Some creditors who filed breaches of contract claims against Karousos include husband and wife Derek Bandarra and Jill Dagwan for $8,736 and $11,655 for Kelly Bairos of Rhode Island’s East Providence.

The July 9 auction is the second involving Karousos’ property. Last month, a Karousos building on bank foreclosure list was purchased for $145,000.

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Home buyers who were expecting to purchase homes at discounted prices in foreclosure auctions were surprised to find out that banks are asking for higher prices to recover their investments.

Harmony Homes real estate agent Jimmy Marston likens finding a good deal in foreclosure auctions to searching for a needle in the haystack.

He said that lenders are asking for higher prices because homeowners owe them more on their properties.

People are losing their properties after just a few years of paying for it. This means that banks will have to sell the foreclosed properties at higher prices to recover their investments.

A study of land records for foreclosed homes in 2008 showed an average period of three years and nine months between the taking out of the loan and foreclosure. The size of a property’s outstanding loan principal is a major factor being considered by a mortgage lender when it sets the minimum bid price.

In Lynchburg, Virginia, out of 211 forfeited properties in the area this year, 180 were auctioned but failed to find a buyer. Instead, these properties were returned to the lenders’ portfolio.

A foreclosure auction is the final step in the binding agreement between the borrower and lender. Under the agreement, the borrower gives authority to the lender to sell his home if he defaults on his monthly payments.

In the event that the borrower missed a payment on his mortgage, the lender will charge him a late fee. Aside from that, the lender will send letters to the borrower or make telephone calls to remind him of his financial obligation.

If the borrower and lender failed to work out a deal that will allow the former to retain homeownership, the property goes into foreclosure proceedings. The lender will then hire a lawyer to help auction the property and recover its losses.

Most home buyers who have turned their attention to foreclosure homes have realized that in addition to getting leads from foreclosure listings, there are also the foreclosure auctions. But before you get too excited and sign up for the next one, you must know some important facts about these foreclosure auctions.

For starters, you must understand that foreclosure auctions are not for the faint of heart. You should expect the other bargain hunters to be there, hoping to grab the best foreclosure property at the lowest prices.

With this in mind, you must be prepared before participating in foreclosure auctions. You should start by making sure that your financial resources are in order. For this reason, you must make sure that you have set a bid limit so you will not get carried away and go over your budget. Most foreclosure auctions also require you to bring cash or cashier’s check before allowing you to bid while some will only require you to bring at least 10 percent of your bid amount. It would probably help to find out the rules and regulations followed during foreclosure auctions in your area to avoid any surprises.

Another thing that you should keep in mind is that sellers during foreclosure auctions are not obligated to make full disclosure about the property’s physical condition. This means that you have to set aside a budget for possible repairs and even secondary liens. If you like, you can check out the foreclosure properties to be auctioned off before the actual foreclosure sale to give you an idea which, among the many repossessed properties you will be bidding on, will cost you less.

If you found yourself winning a bid, you should immediately proceed to the foreclosure auction organizer and find out what you need to do to secure the ownership of the property. Again, it will all depend on the procedure followed by the foreclosure auction.