I don't know much about mortgages so I was wondering if you get foreclosed, whatever that means. I guess it's when the bank demands the entire loan for nonpayments. Do you get what you paid so far back on the house and lose the house? Doesn't sound so bad to me, just buy another house. What's the fuss?
2007-11-30 04:10:55 · 12 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I don't understand how you don't get your equity back. What if you spent say $100000 in payments so far. The bank just keeps it? That doesn't sound right.
2007-11-30 04:30:09 · update #1
You get "what you paid" back if they are able to sell the house after foreclosure for more then you owed on it, plus the cost of foreclosing and selling.
You are not going to be buying a cup of coffee on credit, let along another house. This pretty much labels you as a serious loan threat.
2007-11-30 04:17:09 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Your first question was what is it. Fore closer is when the owner of the property has failed to make the payments on time. After missing 3 payments the bank will foreclose.After the sale of the property you may still end up owing or if it sells for more and the penalties and fee's are paid you would get the balance..( Very Rare) After fore closer you wouldn't get a loan to purchase a home for a long time and your credit would be horrible for a long time. If your going to be late or can't make your payments most banks will work out a plan to help you get back on track .. Look the bank doesn't want to foreclose and will work with you to prevent it.
2007-11-30 04:27:40 · answer #2 · answered by eddy t 2 · 1⤊ 0⤋
Foreclosure is when the lender takes the house from you becuase you are not making the payments. They will then try to sell the house for as much as possible to get their money back.
If you had equity, you would be best to try and sell it quickly at a reduced priced to avoid foreclosure. Foreclosure will go on your credit report, and you will have next to no chance to get a loan for a car, credit card, etc for a long time. Many credit card companies will monitor your situation and can push up the interest rate if your credit rating falls.
You say you just want to rent from now on? The new landlord will pull a credit report. Many will not rent to people that have foreclosures or evictions.
Do you see the fuss?
2007-11-30 04:30:01 · answer #3 · answered by Tim 7 · 1⤊ 0⤋
The bank sells it and takes what they are owed plus any expenses and fees for the seizure and sale and you get whatever is left. The trouble is, there is more likely to be less money than more money. There are a lot of reasons for this. The bank is in the business of lending money and expertise isn't selling house. They will also want to sell it fast, in part it makes sense, because if you incur $5,000 of interest a month, then selling it now instead of 3 months from now you would consider $15,000 the same thing (just one of several issues related to selling now) Plus, there are a lot of vultures out there looking to get a great deal and know they can find it within foreclosures.
The best idea is to be more proactive. If you are getting close to foreclosure, consider selling yourself. You can then manage the expenses and asking price, and could end up with more money back.
2007-11-30 04:35:19 · answer #4 · answered by JuanB 7 · 1⤊ 0⤋
A foreclosure means that the bank is reclaiming from you the collateral (the house) which you offered in return for borrowing the money from them. Foreclosures occur when you fail to make your payments as agreed.
The bank will take ownership of the house, and then sell it for as much as they can recover by selling it. The proceeds from their sale will be used to pay off any mortgage balance you owed up to the time they took possession, and they will also charge you for the expenses of having to go through the foreclosure process. That can run into the tens of thousands of dollars, given the attorney fees and other legal hassles they encounter in handling the foreclosure.
Furthermore, if they don't recoup enough money from the sale to offset what you owe including expenses, they may hold you liable to pay for the shortfall.
Do you understand 'the fuss' NOW ?
2007-11-30 06:18:31 · answer #5 · answered by acermill 7 · 0⤊ 0⤋
You got some great answers already, I wanted to add that you should purchase "mortgages for dummies" - this is not a slam. I bought this book and a few others before I bought my first home a few years ago. They sell them for cheap at used books stores and it's an easy to follow book that tells you all you need to know about mortgages.
I'm now in my 2nd home and looking to buy my third and I haven't had any issues.
It's better to ask the question now than ask when you're about to lose your home.
2007-11-30 06:45:09 · answer #6 · answered by LifesAMystery 3 · 0⤊ 0⤋
Seabass, I think you are missing an important point.
The bank already gave the money to the lender. The payments are returning the money to the bank that the borrower spent. The 100,000 or whatever in mortgage payments is not profit for the bank.
2007-11-30 04:38:30 · answer #7 · answered by Landlord 7 · 3⤊ 1⤋
Eddy's right, You won't be able to rush right out and buy another house. This will take your credit score from 800 to 200. So call your bank and ask them for help!
2007-11-30 04:39:34 · answer #8 · answered by phyllisemile2 1 · 0⤊ 0⤋
No you don't get anything back for what you already paid in. You'll be lucky if you don't owe additional money for what wasn't paid or recouped when the lender sold the house.
2007-11-30 04:15:17 · answer #9 · answered by Judy 7 · 0⤊ 0⤋
What isn't fair about it!!
You have the opportunity to get your equity out be NOT going into forclosure and by selling it yourself.
2007-11-30 04:46:28 · answer #10 · answered by Anonymous · 0⤊ 0⤋