Question about home foreclosure from wise DUers

[XanaDUer2]

If a house's mortgage is not being paid, and goes into foreclosure, if the bank sells the house, does the owner get equity back at the sale?

$100,000 house, $25,000 in arrears, bank takes it back, owner gets $75,000?

I know nothing about this. TIA

[we can do it]

1. No they do not.

[XanaDUer2]

3. Gotcha, thanks nt

[SheltieLover]

2. Not usually.

They sell property at auction & homeowner usually gets screwed.

[XanaDUer2]

4. So same as it ever was nt

[SheltieLover]

5. Yup, the rich gain more & the average person bears the burden.

Sadly.

[okaawhatever]

6. If there is anything left over they do. If it's a 100k house the key

Is what is the mortgage balance. 25k in arrears on a mortgage of how much? $25k I’m arrears only tells u how much needs to be paid to keep house from being foreclosed on.

If house sells at auction for 100k, mortgage is 50k, closing costs and attorney fees are 10k the owner gets $40 k back after sale.

If house sells for 100k, mortgage is $98k, fees $10k owner gets nothing and can be sued for other $8k,


Hope that helps

[XanaDUer2]

8. Ty!

[Turbineguy]

11. If you are in this situation

and get some money (inheritance from your crazy Uncle Bob), be sure to deposit it in a different bank as your bank will attach the funds to cover their loss.

[TexasBushwhacker]

7. Absolutely not

However, there are alternatives if you can start making payments again.

Let's say you were out of work and couldn't pay, but now you can. The bank may be willing to refinance, rolling the amount you owe back into the loan, and possibly extend the term of the loan. I did this once when I had been under employed for a year.

They may also be willing to do a short sale, where you agree to put it on the market for a quick sale. You pay back what you owe on the loan, but there may still be some equity left for you to start over with.

If you can afford to make monthly payments now, it's in your best interest to contact the mortgage holder BEFORE they start the foreclosure process.

[XanaDUer2]

9. Thank you!nt

[TexasBushwhacker]

10. You're welcome. Good luck!

It's also worth mentioning if you can work our something BEFORE the foreclosure process starts, it won't ding your credit. If they've already started the foreclosure process, even if you're able to work things out, just the fact that they started the foreclosure with go on your credit record for 7 years. That probably won't affect things like getting a credit card or buying a car, but it will make it much harder to buy another house.

[Ocelot II]

12. How much is the entire mortgage, including the amount in arrears?

If the bank forecloses they'll sell the house at auction (banks don't want to be in the business of keeping and maintaining houses), and they'll try to get enough to satisfy the entire outstanding mortgage, not just the arrears. There will also be some fees and expenses involved, so unless the property is sold for an amount in excess of the total mortgage amount plus fees, the owner won't get anything back. The bank just wants to cover its losses.