Repossession

[Maggoty]

How does it work?

If for example you have a �180K house

Your mortgage is �160K

It gets repossessed

Do you

a) just hand the house to the mortgage company and owe nothing and they give you the difference minus costs or

b) have to wait until the mortgage company sells the house and then pay the difference between the selling price and the mortgage (ie if it goes for �150K then you owe them �10K), whilst owing the monthly payments until it does sell (or they sell for �170K and they owe you �10K minus costs) or

c) something else?

Does the system differ in the US if you have to foreclose?

Sorry to be such a numpty

[redcrx]

the exact details I dont know

but the mortgage company would sell it at pretty much any price, rarely whats its worth and the mortgage holder would then owe the difference plus all costs incurred to the point of selling.

If you are ever at risk of reposession then its better to try and sell the property first rather than think that handing the keys back is an end to it all

[Maggoty]

Thanks redcrx, OH is convinced you can just hand the keys back and that be the end of it!!

xx

[sandmaster]

The mortgagee has to sell at market price. But that is generally only what someone else is willing to pay. If it sells below the mortgage figure the borrower will be liable for the shortfall, conversely if it sells above the mortgagee will pass this on to the borrower (I have known this happen where a house was repossessed at what turned out to be the bottom of a recession and by the time the house sold it had shot up in value!! But this is exceptional. Redcrx is right when he says it is best to try and sell it yourself but that can be a lengthy process and you would need to maintain mortgage payments in the meantime.

[ummmm]

Oh no. It could work if they sell it at market value and it has plenty of equity but the bank would want to sell it on quickly so will sell it at a reduced price.

[sandmaster]

Foreclosure is available in the UK as well as the USA. Basically it means that title passes to the lender in the event of default. So if it is sold above the amount of the mortgage the lender keeps the lot. Daylight robbery when the mortgage is a fraction of the property's value.
I have never known foreclosure in the UK.

[Maggoty]

Is the US foreclosure system the same then?

x

ps I've always assumed that red CRX is a girl, apologies if I'm wrong!!

[ummmm]

She is....

[Maggoty]

ah goodo - didn't want to upset "him" by thinking of a red CRX as a girls car LOL

[redcrx]

lol yes I am a she :)

[Hammer]

In the US, you hand back the keys and walk away, whether there is a profit or a loss.

In the UK, you get the difference between the sale price and the mortgage (which could well be negative meaning you still owe money)