Does the homeowner keep any money from the forclosure sale?

Question

say you have 75% of your house paid and owe 25% and you're headed towards unable to pay so I suppose the bank sells your home. But will they keep the entire proceeds of the sale,would I see any money?I did pay off most of it.

Answer 1

It is entirely possible for you to receive a check from the proceeds of a foreclosure that obtains bids in excess of the bid made by the lender.

   Lenders will bid the balance of the loan and costs for sale.

   I have seen people lose property through foreclosure and yet be contacted by the foreclosing firm with a six figure overbid.

  This was common when the real estate market was much hotter than it is today, but the idea is still quite possible.

Answer 2

Once it is foreclosed on, all the payments you made so far mean nothing.  The bank would keep all of the proceeds AND the 75% that you paid, because you defaulted on the loan.

Answer 3

In foreclosure, the lender regains ownership of the property and if they can sell it, they get the money.  In addition to the payoff on the mortgage, they are also due money for all of the legal and court costs incurred in the foreclosure process, plus the costs of the sale.

Answer 4

All the above posters except BLCOHEN and loanmaster are over simplifying your situation by making an assumption that they shouldn't.  IF at the foreclosure sale nobody else bids on the property then the bank will win the property because they have a bid in equal to the amount of money they are owed.  IF somebody else steps in and places a higher bid than the amount owed, then the bank is paid off(and has no further interest in the property) and the difference between the bid and the amount owed to the bank will be sent to the foreclosed owner.

In your case I would bet somebody will bid over the bank because of the large amount of equity(the difference between the bid amount and the market value) in the property.  Good luck!!

Answer 5

If you only owe 25% of the balance on your mortgage you should be able to work something out with your lender.

You should contact the Loss Mitigation Department and see if they have a program that will help you.

Tell them of your circumstances and what you can do to bring the mortgage current and any problems you might have had or encounter.

The only way you can keep or receive any money from a foreclosure is if the property sells for more than the mortgage owed and legal fees involved involved in the foreclosure.

Any money exceeding that will be given to the owner of the house.

An example of this would be if the mortgage balance is $125,000 and the cost of the foreclosure legal and other fees was $5,000. The total  is $130,000.

At the foreclosure sale if the property sold for $140,000 you then would receive a total of $10,000.

I have yet to see this happen, but that is the law in most states in the foreclosure procedure.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 6

No, once it is theirs it is theirs.    Why let them foreclose?