79

The bank only cares about getting paid the owed amount as quickly as possible. Anything more than that the bank has to give to the owners whose property they're auctioning. Also, a house that could sell for $250k on the open market if the sellers wanted to sell and move out might be worth a lot less if the sellers don't want to move, might refuse to leave ...


70

You did not add a country tag, but in most countries, a plot of land and any buildings built on it become one inseparable unit which usually can not be sold separately. If you sell one, you also have to sell the other. That means if your bank forces you into foreclosure, they will auction the house, the plot of land and the other things you build on and ...


24

As Patrick87 cogently points out (+1), anything more than the outstanding debt on the property being foreclosed on (plus various fees for filing the foreclosure paperwork etc) belongs to the original owner (the person(s) being foreclosed upon), and not the bank. Remember also that the bidding starts at the price the bank sets, and the bank can choose to ...


18

Your best bet is to pay for title insurance. If you do the same search as the title company, you'll probably find (and miss) the same things they would. By letting a title company do the search and paying for their title insurance, you're covered in case something else surfaces. In a case like this you should be getting a good enough discount, don't take the ...


18

You're not responsible for the mortgages on the property - those are agreements between the lender and the borrower. The risk you have is that the title search missed something. If the seller (i.e., the bank or banks who foreclosed) did not have full rights to sell the property, and there was another party who had a lien on the property or had an interest ...


17

Land and modular homes are always sold separately. So unless you backed the loan on the modular home with your land, there is no reason to believe that you could lose your home when they foreclose on the modular home. In the U.S. at least, different states have different bankruptcy laws. But many states allow you to keep some life necessities in the ...


16

The "just accounting" is how money market works these days. Lets look at this simplified example: The bank creates an asset - loan in the amount of X, secured by a house worth 1.25*X (assuming 20% downpayment). The bank also creates a liability in the amount of X to its depositors, because the money lent was the money first deposited into the bank by ...


15

No that is not the way it works. As long as you owe them a single cent, if you are not paying as agreed, they can foreclose. It is up to you to find a way to pay what you own in other ways (for example, a HELOC). They will only get what you still owe them after the foreclosure sale and the remaining money is yours, but that does probably little good for you....


12

Yes, the borrower is responsible for paying back the full amount of the loan. Foreclosure gives the bank possession of the property, which they can (and do) sell. Any shortfall is still the borrower's responsibility. But, no, the bank can't sell the property for a dollar; they have to make a reasonable effort. Usually the sale is done through a sheriff's ...


12

Why? Under what logical set of assumptions should the starting bid have anything to do with the outstanding amount of the loan? The lender is primarily interested in getting the property sold, getting his money back and recover from the situation. It thus makes sense for the lender to ensure that the house gets sold. If the starting price of the house is ...


11

If the couple has been making their payments diligently for 27 years, first off I think the bank would be willing to negotiate. A foreclosure is not a good solution for anyone. Also, keep in mind that you are talking about 8% of the original loan amount. Let's say the house went for $150,000 (nominal) when the couple bought it 27 years ago. That'd probably ...


9

When you buy a house, even if you use a mortgage, you own the whole house. You just also have a large debt which is secured on the house. This means that you have agreed with the mortgage company that if you fail to pay the debt, they can seize your house and sell it to satisfy the debt. Hence the relative value of the house to the mortgage is not relevant ...


9

Generally, yes, although not in all states. According to this article in Time: But in non-recourse states — Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, and Washington — the bank has no recourse beyond the repossession of the property. As for the question about what price the bank can ...


7

There are already several answers which talk about various considerations based on the house, and the lender's desire to get their money back. One consideration I haven't seen discussed yet is the cost/availability of funds to purchase a foreclosure. The way most people purchase homes is via an underwritten mortgage process. This generally isn't an option ...


6

Someone has to hand out cash to the seller. Even if no physical money changes hands (and I've bought a house; I can tell you a LOT of money changes hands at closing in at least the form of a personal check), and regardless of exactly how the bank accounts for the actual disbursement of the loan, the net result is that the buyer has cash that they give the ...


6

The current mortgaged owner would typically not have the right to sell any portion of the house without approval from the bank. The bank doesn't "own" the house through the mortgage, but they do have a series of rights that, in some cases, look similar to ownership. Remember that a mortgage is just a loan that uses a house as collateral, to reduce the risk ...


6

You did not specify how large your plot of land is so I offer the following ideas: If this is a large plot of land then you can look into selling the house with just enough land to make it desirable. You will need to call your local government and zoning board but it could be possible to only sell your home on a 1/2 acre plot if you have 5 acres for example....


5

No, if you purchase it with all taxes and leins dismissed, in Pa, it usually goes up for sale 3 times before they drop all leins and taxes. Before you purchase the house, check eith sheriff and make sure they are selling with the above dismissed, otherwise, you can get youself in a real mess.


5

If the homeowner knows the situation is hopeless, and the end result will be the loss of the home, jumping to the end result can be helpful. It is quicker, they don't spend as much time fighting a losing battle. Deed in Lieu of foreclosure is not so great for the borrower if the bank goes after them for the rest of the money owed. There can also be tax ...


5

First, everywhere in the US that I know of the porch is part of the house. It would fall under most code ordinances as a permanent fixture. There is actually a lot of code around porches/decks. To be considered permanent it has to be attached in the ground or to the house (yours sounds like both). Secondly, any change like this to the house would have ...


5

No, it is not true. It depends on the market, the banks' inventory, the original debt that was owed, etc etc. The banks generally want to recover their money, so in case of underwater properties they may end up hold a property for years until prices bounce back (as it happened during the last crisis when many houses were boarded for months/years until banks ...


4

It is in the bank's interest to sell the property for as much as they can (although it is doubtful they will put as much effort/time into selling it as the owner might). They will certainly not sell it for $1. The main reason for this is that the bank would prefer to own $100k, than a loan to them from a customer for $100k. Banks have to discount the value ...


4

I've done this in AZ. It's important to know which lender is foreclosing, because if it's not the most senior one, then your purchase can later be foreclosed. A foreclosure extinguishes all junior interests, but can itself be extinguished by a more senior interest. I may not have the correct terms here but you get the idea. You should also check to be sure ...


4

You should talk to a bankruptcy attorney local to you. While bankruptcy laws are federal, there are a variety of local rules. As an example in CA, I've heard of a trustee going after a debtor's IRA account. Retirement accounts are generally off limits, but not always. Additionally, structuring your assets for the purpose of shielding them from creditors ...


4

Typically there is more than the main home loan lein on a house that’s in foreclosure. The only way to guarantee clean title to a buyer is to foreclose eliminating most additional leins. IRS Leins for example don’t go away automatically but need to be paid. Even if you see someone buying a house for 100k it often has a lot more debt that a buyer takes on.


3

Find out whether your state has a homestead law or something similar, which might protect your primary residence during bankruptcy. You may have to explicitly register to receive that protection; details differ. Frankly, you'll get better answers to this sort of question from an agency in your area which deals with folks at risk of of bankruptcy/foreclosure/...


3

It's impossible to give a specific answer as to how much your score will decrease, because it depends on a lot of personal specifics. Experian suggested they were similar; short sale averaged around 120-130 points while foreclosure averaged 130-140. However, it's very much dependent on other elements; if you have an 800, it's going to knock off more than ...


3

I question if this situation is only because of cancer. You say that the property taxes are several years behind. The medical situation accounts for (maybe) a year. Something was already going wrong in her financial life before cancer. That problem needs to be addressed before a stable situation can be reached. If your mother is still of sound mind, you ...


3

You should really ask a local attorney/RE agent, but generally HOA and RE taxes are attached to the property. If the trustee sale is by the mortgage bank, then it is likely that at closing they will require you to pay the prorated portion of the HOA fees and the taxes. I bought a foreclosed home once directly from a bank, not through a trustee auction sale, ...


3

Ask any buyer if he/she would like the price to be cheaper and they'll say yes. It's not really a negotiation. The bank sets a price and you can put in a higher or a lower bid. Some set a base price and will not deviate from that. I don't know if this will be helpful but my first home was a cannibalized repossession that was foreclosed by an out of ...


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