2007-11-27 13:50:54 · 4 answers · asked by Jun P 1 in Business & Finance ➔ Renting & Real Estate
If the lender sells the property for LESS than the outstanding unpaid principal balance, the balance is reduced by that amount.
The lender then files a deficiency judgement/lien and the judgement/lien is recorded against the credit report. So yes you would still owe the lender in this case.
2007-11-27 14:07:22 · answer #1 · answered by !!! 7 · 0⤊ 0⤋
Foreclosure laws vary from state to state. In some states, it is possible to see the home sold at auction and end up still owing the bank. The reason for this is that some states allow "deficiency judgments." Here's how it works:
Let's say your bought a house and financed $150,000.00. You defaulted on your payments, the property was foreclosed and ultimately sold at auction for $125,000.00 (less than you owed on it, which could very well happen in today's real estate market). If the house is in a state that allows deficiency judgments, the bank can get a judgment against you for the $25,000.00 difference.
2007-11-27 22:14:51 · answer #2 · answered by Nancy G 4 · 0⤊ 0⤋
Lets say the bank forcloses on you and you owe 100k on the loan. Bank sells the house at auction for 80k. You owe the bank 20k (Plus any fees they add on for repo'ing it from you)
Same way with a car. If they repo, they sell at auction and bill you for the remainder.
2007-11-27 22:08:33 · answer #3 · answered by Anonymous · 0⤊ 0⤋
no, they give you the house for free
2007-11-27 21:57:45 · answer #4 · answered by Anonymous · 0⤊ 1⤋