Zillow Advice: Mortgage - What happens if there is equity and the bank forecloses? Does the bank keep all the money? http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ Zillow Advice | Zillow Real Estate If the&nbsp;foreclosing party&nbsp;becomes ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ <p>If the&nbsp;foreclosing party&nbsp;becomes the property owner through the Trustee Sale and later sells the property for more than their costs, the gain is theirs.<br/><br/>If someone purchases the property at the trustee sale for more than the foreclosing party is due, the difference goes to the homeowner.</p> Thu, 06 Jan 2011 18:06:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-06T18:06:00Z You'll want to know YOUR ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 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 Tue, 04 Jan 2011 13:06:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-04T13:06:00Z I totLy agree with Justin. ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ I totLy agree with Justin. Great answer. Tue, 04 Jan 2011 07:01:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-04T07:01:00Z You posted with location ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ <p>You posted with location in California.&nbsp; In CA, the foreclosure will occur through trustee sale at a local courthouse.&nbsp;&nbsp; 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.<br/><br/>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.&nbsp;&nbsp; In this event you would not get any money back except maybe cash for keys when they come to evict you.<br/><br/>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.&nbsp;&nbsp; The foreclosing&nbsp;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.</p> Tue, 04 Jan 2011 00:26:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-04T00:26:00Z You can sell your home up ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 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. Mon, 03 Jan 2011 20:22:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-03T20:22:00Z I agree that you should try ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ I agree that you should try to sell. If you have equity, it would not be a&nbsp;short sale &nbsp;and you will avoid the long term problems with a FC Mon, 03 Jan 2011 20:07:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-03T20:07:00Z As you can see from the responces ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ As you can see from the responces yes the bank will keep any equity. Mon, 03 Jan 2011 19:51:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-03T19:51:00Z In many states it is no different ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ In many states it is no different than a "pawn shop".&nbsp; If you don't pay, the collateral has to be liquidated to pay, and whatever they can get is what they get.&nbsp; 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.<br/><br/>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.<br/><br/>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.&nbsp; 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.&nbsp; Sure, people lose jobs and get sick, but this is no excuse for not working out some arrangement with ones creditors.<br/> Mon, 03 Jan 2011 19:42:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-03T19:42:00Z Banks can keep more money ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ Banks can keep more money than what they are owed? Mon, 03 Jan 2011 19:14:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-03T19:14:00Z Yes and don't let them take ... http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 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. <br/><br/>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?<br/><br/>Happy funding, Rudi Sun, 02 Jan 2011 23:43:00 GMT http://www.zillow.com/advice-thread/What-happens-if-there-is-equity-and-the-bank-forecloses-Does-the-bank-keep-all-the-money/379245/ 2011-01-02T23:43:00Z