Brett Golden, 31, was one of the few bidders at a recent foreclosure auction to walk out with a purchase: a 2.5-story, 1,352-square-foot house in Queens, N.Y., that he got for $365,000. The previous owner had bought it in June 2005 for $415,000.

Once Golden and his father -- who together run a 50-year-old family business of buying and flipping foreclosed properties -- are done fixing this place, they hope to sell it for about $480,000, netting up to $80,000 after expenses.

Buying the house wouldn't have made sense but for a small detail: The mortgage lender, HSBC, put it up for auction for $90,000 less than it was owed. In other words, it went below the "upset price" of the property. The upset price, also called the judgment amount, is what the bank is owed on the property, usually the sum of the outstanding mortgage and any interest and fees accumulated since the start of the foreclosure process. Normally, lenders put up houses for auction with bids starting at the upset price in order to recoup their costs.

But as foreclosures increase, some banks are beginning to reconsider their required bids. "In the past few months, I'm starting to see banks come down on upset prices," Golden says.