house is repossessed & bank auctions 2 recover debt+fees, & there is $ left over frm sale, do you get it back?

Question

Please help me settle a debate. Here is the scenario:

Say you buy a house for $100,000 and get into a 30 year mortgage with a bank. Over the years, you manage to pay off 70% of the principal (with interest), and thus you have built equity on your home (say 70%). Then disaster strikes and for whatever reason you can't make your monthly payments. You try to sell the house on the market but no luck. For simplicity, you have $30,000 left to pay on your loan.

The bank ends up repossessing your house and auctions it off for $80,000. From the sale money, it keeps the necessary amount to cover your outstanding debt (say $30,000), and any administrative costs it has incurred (say $2,000). The left over money is $48,000.

Now, here is the question: where does this $48,000 go? Does the bank keep it or do you get it (since you built 70% equity)? Does your equity vanish if your house gets repossessed and auctions?

Answer 1

Initially, the sheriff will get all the proceeds. Then the court will order so much paid to the lienholders (bank). The sheriff (or clerk of the court) will hold the rest until the court orders the money paid to the former owner -- on their motion for it to be paid to them.

Answer 2

Yes your equity would vanish but this is an unlikely scenario. Not too many people would let their house be foreclosed on with that much equity.

If the house is worth $80,000, the homeowner could put the house up for sale for $60,000 and have it sold in a week. That would stop the foreclosure and still give them some of the equity.

Answer 3

why not take the equity out of your house with a second lein and make the house payments. Or, go on ebay and sell lottery tickets for a drawing for your house - 2000 tickets @ 50.00 each = 100, 000 dollars. Have the drawing and post pictures on the internet. Take the money and go to Canada where you can live cheaper than here. Good luck.

Answer 4

Sorry but you dont get ur money back on that. The funny thing is the banl will say that the xt 48000 went to pay for repairs, pay of employees that went to market the house, permits from the city to auction the house and so on. Not only will ur equity vanish faster then you can say plaese but ur credit go drop hard.

Answer 5

Theoretically yes, at least in California. However, there are all kinds of expenses related to the process of foreclosure and selling your property, and the fact is that it's in foreclosure means there's a lot of unpaid interest, plus the fact that your contract usually states the bank gets to add a charge for making them go through foreclosure. Not to mention any other loans and liens you may have taken out to save it.

The practical upshot is that it is unlikely you'll get money back when your property is foreclosed. Better to sell it yourself before that happens.

Answer 6

debt consolidation

getting out of debt is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is:

http://umgarticles.atspace.com/debt-consolidation.htm

Answer 7

Debt Consolidation - Get Out Of Debt
http://www.askaquery.com/Answers/qn1643.html

How to Hire a Debt Counselor?
http://www.askaquery.com/Answers/qn1584.html

What is Debt Relief?
http://www.askaquery.com/Answers/qn1583.html

Debt Management and Building Wealth
http://www.askaquery.com/Answers/qn1581

How to lower your debts?
http://www.askaquery.com/Answers/qn1576.html

How to reduce debt : How to lower your expenses?
http://www.askaquery.com/Answers/qn1577.html

Answer 8

nope repossession= loss of home. Its not yours anymore its the states.

Answer 9

HELL WHO KNOWS???!!!! WHO THE **** GETS THE MONEY???!!!! JUST SOUNDS LIKE YOU ARE **** OUT OF LUCK??!!! THERE??!!! OKAY OKAY!!! BYE BYE FOR NOW!!!!