|
Posted by Finance Guy on September 6, 2007, 3:22 pm
>Kind of strange isn't it... For instance, let's say you've paid off
>50% of your home and then fall into tough times. They foreclose and
>take your house... that's right... they get to take 50% of the value of
>the house because you're late. Talk about screwed up (yes... I know.
>You entered the mortgage agreement knowing that was the way it worked,
>but have you ever seen a mortgage agreement that didn't work that way)?
That's not quite the way it works. The bank will foreclose, and sell
your home - possibly at auction.
The bank keeps the amount outstanding on the loan plus expenses, etc.
The rest goes to you.
Unfortunately, the bank doesn't have an incentive to get the best
possible price for the home - all they need to do is get the
outstanding loan balance. So, often times, the home end up being sold
for far less than it could have brought, either through apathy or
dirty dealings.
This is why you're usually much better off selling the home yourself,
if you can, prior to foreclosure.
But, the main point is that the bank IS NOT entitled to all your
equite just because they foreclose - only the amount they're still
owed on the loan.
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap