How do I recover appreciated property value from bank foreclosure?

Question

property value is 55k. bank foreclosed on 43k. can I get some of that appreciation from the bank? if so, how do I go about getting it?

Answer 1

Depending on the laws of your state and where you are in the foreclosure process then yes you may be able to recoup some of that money.

If the bank has taken possession of the home then no, you wont get anything.

If the bank does not have possession then depending on the state you live you may have a "right of redemption". Here in Michigan the home owner has 6 months from the time of foreclosure to redeem themselves (pay off the bank). If your state has a similar law then you can use this time to try to sell it for the 55k you say it's worth.

Which brings me to value. Value is so subjective that I hope your basing your value on what a good reputable REALTOR has told you and not based upon an appraisal or what you paid for it or think its worth.

In my market home values have been decreasing for the last 2-3 years. Plus I've been seeing alot more banks pursuing their losses, meaning suing the owner of the foreclosed home for the difference, so after the bank sells your old house they may still sue you if there is any loss on their part.

Good Luck

Answer 2

The details matter so you need to check the facts.

The bank took the property or forced its sale. If the property sold at auction then that is the price and it would be hard to claim there was any equity above that price.

If the property had equity then the best way to get at it is to sell before the foreclosure took place. Many times the property appears to have a value but the process and costs associated with selling result in the owner realizing a lower figure. Equity is not there if you can not get it out.

In some states there is a right of redemption. That means you can buy the place back for what was paid at auction or what the bank took it back for (technically they win the auction when their opening bid is the highest and the lender gets the title).

I am not sure there is any equity in this deal. Buying and selling costs could easily wipe out most of the difference between the numbers you reported.

The URL below will have more info. Note that your options can vary by state so if can help to speak with investors and experts in your specific state. Check out the free info as it will explain the foreclosure process generically and then you can adjust for the state you are in.

Answer 3

if you were to read your mortgage documents carefully, it would be easy for you to see that you signed a promissory note to pay the bank back the money it fronted to you to buy the property, in installments, which supported the mortgage.

of course there is no way you can ever retrieve any appreciation on the property that you walked away from. you did not live up to your promise. real estate tends to appreciate in time. it was entirely up to you to keep up your payments so that you would not lose your equity, or your appreciation. the bank probably lost out anyways.

by the way, the worst things to have on your credit record are foreclosure and eviction, even worse than bankruptcy.

Answer 4

No you won't recoupe any money from a foreclosure. They have a lot in legal fees(could be more than $10,000) that they will want to try to recoupe when they sell if possible. Then there are the selling fees for a realtor, plus closing costs.

Mention it to your tax guy next year. Sometimes you can get a deduction on your taxes depending on the numbers.

Answer 5

Most likely there will be nothing to recover. When the bank forecloses on you they will attempt to sell the asset to recover the costs left on your old loan (usually at a loss even for them). Then there are fees that are associated with them foreclosing on your old note.

Answer 6

BOA isn't the problem here, save for not maintaining lawns, etc. Your 'nice neighbors' failed to pay BOA as they agreed to do. THAT is why you have foreclosures. Did you expect BOA to continue to allow them to live there free, without the required mortgage payments ? In many cities, overgrown lawns are cut by the municipality, and the property owner is billed. It's not BOA's issue if your area fails to do so.