If a home is purchased by a buyer 2 years ago for $500,000, and is currently being foreclosed upon, is the new owner responsible for any remaining balance on the mortgage? In other words if there is $400,000 remaining as the balance of the $500,000 mortgage, is the new buyer responsible for the remaining $400,000 on the initial buyer's mortgage on top of other fees?
2006-09-25 15:18:48 · 5 answers · asked by curious 2 in Business & Finance ➔ Renting & Real Estate
Basically, no. Once the home is foreclosed upon, the mortgage will be wiped out (either by going through the foreclosure sale/auction, being written off by the mortgage company, etc). If you buy the foreclosed home at auction, you just have to pay whatever you bid on it. There are, however, other ways to buy a foreclosed home instead of letting it go to auction. If you are interested in purchasing the home outright, you should contact the mortgage company or the homeowner. Sometimes they will allow you to purchase the property for less than what is owed on the mortgage just to get rid of it. Usually, however, the mortgage company wants to get their full payoff of the mortgage. This means, if $400,000 is still due on the mortgage, you can probably get your own mortgage of $400,000 and buy the property. Hope this helps. If you have more specific questions, let me know!!
2006-09-25 15:28:22 · answer #1 · answered by Amy 2 · 0⤊ 0⤋
Absolutely not unless agreed upon in the sales contract. I'm a licensed realtor so I know this. The buyer would be responsible for any taxes in arrears, in most cases, but that can also be negotiated. The buyer is buying the house from the current owner, which would happen to be the bank. A buyer can "assume" a mortgage if it's in "active" status with the bank, but it's not an "across the board" requirement. Hope this helped!
2006-09-25 22:29:47 · answer #2 · answered by vrandolph62 4 · 0⤊ 0⤋
no the new buyer is not resposible for the $400,000 mortgage of the previous owner..only the mortgage they took out!
if your buying a home in foreclosure, call the bank and negotiate a short sale with them http://www.theforeclosuresinfo.com/foreclosure-articles/short-sale.html
a lot of people will tell you this and that, but have no exp with handling foreclosures..investing in foreclosures is simply the best thing to do now and you should not pay for market value!!!!
regardless what your realtor or attorney say!!!! pay less not more is a smart investment choice.
just like heading to a mall, you take take many different roads, it's the same way investing in foreclosures, different ways of buying one
2006-09-26 00:31:59 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yes. Well, they will sell the house and the homeowner is responsible for the difference. If the balance was $400,000 and they sold it and got $300,000 for it, the homeowner would still owe $100,000. Most people end up having to file for bankrutcy.
2006-09-25 22:26:31 · answer #4 · answered by First Lady 7 · 0⤊ 1⤋
if the house has been foreclosed on,you are not buying the house from the foreclosed,but from the bank,mort co. etc. who owns the deed. your responsibility is the price of house being sold to you by the bank . always have an attorney before closing ,its your best bet.
2006-09-25 22:42:01 · answer #5 · answered by pete 1 · 0⤊ 0⤋