Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for rosorio189

What happens if there is equity and the bank forecloses? Does the bank keep all the money?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011 - Novato
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (14)

If the foreclosing party becomes the property owner through the Trustee Sale and later sells the property for more than their costs, the gain is theirs.

If someone purchases the property at the trustee sale for more than the foreclosing party is due, the difference goes to the homeowner.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 06 2011
You'll want to know YOUR options, based on YOUR scenario. A lot of advice is given based on assumptions and guesses. Invite at least 3 brokers to your home for an analysis. Make sure they are brokers you've seen in your area so they'll be familiar with your neighborhood. See if there's room to price it aggressively and get it sold. Walking away even is WAY better than a foreclosure, so don't be offended on pricing strategies if they are lower than what you think it should be worth, just ask yourself how you will feel whe the Sheriff shows up? Better by selling it I am sure. For refinancing, if could do that, would you be able to make the new payment? Whatever you do, don't wait until the last minute! John King Broker-Owner Bluefax Realty
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 04 2011
I totLy agree with Justin. Great answer.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011

You posted with location in California.  In CA, the foreclosure will occur through trustee sale at a local courthouse.   If there is substantial equity in the property, an investor will purchase your property at this sale, and if their purchase price exceeds the amount the bank is legally owed on the loan, any excess will go to the homeowner.

If your property is not bought at the trustee sale, it returns to the beneficiary (the bank) at which point they own the property and can do what they please with it at that point.   In this event you would not get any money back except maybe cash for keys when they come to evict you.

As already mentioned, if you are near foreclosure and you have equity, it is very much in your best interest to sell on the open market to recover as much equity as possible.   The foreclosing liendholder (usually a bank) will often offer you an extension on your foreclosure if you can show them that your property is listed or even better in escrow for sale to a new buyer.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
You can sell your home up till the time the bank has completed it's foreclosure process. Also if you need more time an attorney can get you that in most cases. Depending on how much equity you have approach your situation from every level, at your disposal. You may be able to gain secondary financing if you wish to stay in the home. Just make sure you stay away from predatory lenders who only want to scam you. Most banks do not want to into the Real Estate business unless they abosolutley have to. Call your lender speak to their loss mitigation department and ask them what they can offer you. If you have to sell and have time list your home at 10% below markety value and offer the broker an above average commission to get it done quickly. This allows you to motivate on both ends. Keep in mind in your situation a short sale will liquidate your equity.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
I agree that you should try to sell. If you have equity, it would not be a short sale  and you will avoid the long term problems with a FC
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
As you can see from the responces yes the bank will keep any equity.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
Profile picture for Pasadenan
In many states it is no different than a "pawn shop".  If you don't pay, the collateral has to be liquidated to pay, and whatever they can get is what they get.  Some states are also "recourse" states (Though not California as California is a non-recourse state), and in recourse states, they can go after other assets if the collateral is not sufficient to cover the outstanding debt.

And it doesn't always pay to hire an agent to sell the property to recover the equity either as the selling costs (including both agent fees) is often higher than any remaining equity.

But Rudi is right; if one has substantial equity but no means to make present payments and past-due payments, refinancing may be the best option, especially if one has procrastinated so long on dealing with payments they are behind on.  Those that want to keep their house, or at least keep their equity, don't wait so long to deal with their inability to pay their mortgage payments for months on end.  Sure, people lose jobs and get sick, but this is no excuse for not working out some arrangement with ones creditors.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
Banks can keep more money than what they are owed?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 03 2011
Yes and don't let them take that away from you. We may still be able to get you financed with a private money loan. It's probably to late to list your home for sale. In most areas the properties take longer than 90 days to sell.

Although, I've read that some folks have lived in their homes for over two years while being in foreclosure without making a payment. But, with equity, why take that chance?

Happy funding, Rudi
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011
As a general rule when facing foreclosure it is usually better to sell the property instead.  If you have equity and sell you take what you have after the sale and move on.  If you don't have equity you try to do a short sale and ask the bank to accept less than is owed on the property.  Is there times when a foreclosure is better than a short sale?  Yes usually when someone has committed fraud on their loan app to purchase the property.
Ask a real estate attorney, a CPA, and a Distressed property  Real Estate Broker for advice.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011
Yes, they do usually keep it. However if there is equity in the home the homeowner will usually have the opportunity to sell and avoid the foreclosure, both retaining some equity and not having a foreclosure on their credit report for the next 7 - 10 years.

Greg
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011
What do you owe and how much equity do you have? You need to act and sell the house to avoid FC and benefit from at least some of the equity.   
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011
Profile picture for sunnyview
Yes they do, but generally, houses in foreclosure do not have much equity.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
January 02 2011
 
Related Questions
100% financing in California?
Profile picture for George  Raymondo
Latest answer by George Raymondo
February 18 | 7 answers
Are 80-10-10s available?
Profile picture for Frank
Latest answer by Frank
September 02 2013 | 4 answers
Is there any way to refinance an investment property with only 10% equity?
Profile picture for Brian GFL Capital
Latest answer by Brian GFL Capital
July 01 2013 | 1 answers
Quicken Loans, Lending Tree or CBC National Bank
Profile picture for Greg  Bleyl
Latest answer by Greg Bleyl
January 21 2013 | 5 answers
B of A turned us down for a modification, now what?
Profile picture for A. Herrera
Latest answer by A. Herrera
June 05 2012 | 7 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 10 Canyon Green Loop, Novato, CA Home For Sale
    10 Canyon Green Loop, Novato, CA 94947

     For Sale: $885,000

    • Beds: 5
    • Sqft: 2719
    • Baths: 4.0
    • Lot: 5018
  2. 38 Canyon Green Loop, Novato, CA Home For Sale
    38 Canyon Green Loop, Novato, CA 94947

     For Sale: $865,000

    • Beds: 5
    • Sqft: 2719
    • Baths: 4.0
    • Lot: 5357
  3. 34 Canyon Green Loop, Novato, CA Home For Sale
    34 Canyon Green Loop, Novato, CA 94947

     For Sale: $845,000

    • Beds: 4
    • Sqft: 2428
    • Baths: 3.0
    • Lot: 5266