If a house if forclosed, isnt all debts against the house forgiven (such as 1st and 2nd mortgages)?

Answer 1

NO. IN most cases you can still owe money. Your house was merely the security for the loan. Lenders are in the business to make money - "forgiveness" is not usually a business term.

Example:

Lets say you had a mortgage for $100,000. When you made your payments you mostly paid the interest so at the time of the foreclosure you owned $97,000 on the loan you signed.

After it is foreclosed the bank/lender sells the house for $85,000.

$97,000 (amount you promised to pay)
- 85,000 (amount the lender got for selling the house)
____________
$12,000 (the amount still owning on the note you signed)

They can sue you to recoup the amount they lost.

Also, when a house is foreclosed the house now "belongs" to the Lender. It is no longer your house. If the bank sells the house for a profit (more than you owe) they keep the difference. After all, they just sold THEIR house.

Answer 2

When a house is foreclosed upon, the property is sold at public auction for the amount owed on the property including any liens. If the bid exceeds the amount owed, the difference will be given to the person that was foreclosed on.

Answer 3

depens where you live sometimes yes other times no. I know of companies chasing unpaid bills from family of a deceased and had nothin to do with them. And no if the house is mortgaged they may sell for amount owing

Answer 4

Absolutely not. Even in bankruptcy there is no forgiveness, anymore. The laws have changed to protect the businesses from losing millions of money. Better off to keep paying whichever way you can.

Answer 5

if its 4 closed u still owe the money but the bank owns ur house they can sell it 2 get there money but u still owe it also.....

Answer 6

Kudos.

Great answers.

Answer 7

NOPE