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Answers (7)
- Jason Morris, "Myrtle Beach Condos"
- Contributions:41
every state is different. In most areas of the country it is unlikely the foreclosure auction will bring a price higher than what is owed.
- benstaaf
- Contributions:3
This is a hypothetical situation. I am not in this position. I am a new real estate investor and just want to see what I'll be dealing with when I come into contact with motivated sellers, banks, etc.
- agentblu15
- Contributions:353
other folks have already answered your question, so I have a question back to you: WHY would you stop paying on the last year of a 30yr. mortgage???? By that point, you're down to a very small (relatively speaking) portion of the principle left to pay. Do whatever it takes to make those last few payments and own the house. Sure, its value may be way down right now and you may have "negative equity", but once its paid off, that doesn't really matter. You can then hold onto it, without further payments, until the market rebounds and you can get your investment back.
Bailing on a mortgage that still has a long time, or is a short-term ARM left is one thing-- wasting all of the money you've paid over 29 years should be an absolute last resort though!
Bailing on a mortgage that still has a long time, or is a short-term ARM left is one thing-- wasting all of the money you've paid over 29 years should be an absolute last resort though!
- Tiffany Bond, "TiffanyBond"
- Contributions:3010
Penner makes a good point. The bank may not particularly care if they get funds that exceed the loan amount and may sell your property for less than "market" value.
- Scott@Penner Law -Hartford Title-, "pennerlaw"
- Contributions:280
It depends - is there any equity in it? Now note, I don't mean what is the theoretical amount of equity based on the loan amount versus paid amount, I mean how much did it sell for at auction? Did the lender(s) get paid and there's still money left? Then in general, yes. Of course, this is a very general conclusion based on no hard facts or specific laws.
- Tiffany Bond, "TiffanyBond"
- Contributions:3010
I would guess it depends on the laws of your state. You should probably make a quick call to a lawyer in your jurisdiction.
- Jason Bonas, "Jason Bonas"
- Contributions:214
If the home sells at auction, whatever is owed to the bank goes to the bank and whatever remaining equity after all liens are paid off is yours.
the inverse (in some cases depending on the stipulations of the loan) is true also, however, the banks usually assume that if you went into a loan default situation that you probably don't have any additional assets to be used to recapture the defiency. (people who are thinking that since the market has dropped and you will just walk away from a property keep that in mind and check the papers you signed first)
the inverse (in some cases depending on the stipulations of the loan) is true also, however, the banks usually assume that if you went into a loan default situation that you probably don't have any additional assets to be used to recapture the defiency. (people who are thinking that since the market has dropped and you will just walk away from a property keep that in mind and check the papers you signed first)
When a lender forecloses on a property, does the borrower get any of the equity back?
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