Foreclosure actions can wipe out some of the property owner's debt, such as the
original mortgage, home equity loans and second mortgages
. If the proceeds of the foreclosure don't cover all the costs of your second mortgage or other home equity loans, you are still obligated to pay those.
Do you lose all your money in a foreclosure?
If a foreclosure sale results in excess proceeds, the
lender doesn't get to keep that money
. The lender is entitled to an amount that's sufficient to pay off the outstanding balance of the loan plus the costs associated with the foreclosure and sale—but no more.
How long does the bank give you to move out after foreclosure?
Generally, you will usually have
two weeks
to leave your home once the eviction notice has been served. You will not be able to access your home once you have vacated, as the locks will usually have been changed by your lender.
Do I still owe the bank money after a foreclosure?
After foreclosure,
you might still owe your bank some money (the deficiency)
, but the security (your house) is gone. So, the deficiency is now an unsecured debt. … The security agreement gave your lender the right to foreclose. Once the foreclosure is over, the security agreement is no longer in effect.
What are the consequences of home foreclosure?
Eviction from your home—
you'll lose your home and any equity that you may have established
.
Stress and uncertainty of
not knowing exactly when you will have to leave your home. Damage to your credit—impacting your ability to get new housing, credit, and maybe even potential employment, for many years.
How long can you live in your house after foreclosure?
Many states allow for this under a process called “statutory redemption.” Under this rule, you have a limited amount of time to pay the foreclosure sale price (plus interest in many cases), and you are usually allowed stay in your home during the redemption period, whether it's
30 days or two years
.
How long can you live in your house without paying mortgage?
The amount of time between the beginning of the foreclosure and the home auction vary widely from state to state. During this time you can typically stay in your home without paying the mortgage anywhere from
two months to up to a year.
Can bank come after assets in a foreclosure?
One form of default occurs when you don't make your mortgage payments. When this occurs, the bank may decide to pursue a foreclosure on the property. Depending upon the state,
the bank may be able to come after you for money following the foreclosure
.
What is the first item to be paid out of foreclosure funds?
The costs of the sale and the debt owed to the foreclosing mortgagee
are paid first. The mortgagee's only interest in the property is to be fully repaid, however, so if any money is left over, the mortgagee doesn't get to keep it.
Can a bank make a profit on a foreclosure?
When your property becomes the subject of foreclosure,
the bank may benefit from a profit surplus after a foreclosure is completed
. For example, imagine your home was worth $300,000 when you purchased it, and you took out a mortgage loan for $225,000.
What is the waiting period for someone who has had a foreclosure before they can buy another home?
Waiting out the clock
Many lenders require a minimum waiting period after a foreclosure before you can apply for a new mortgage loan:
three years for FHA loans
.
seven years for Fannie Mae/Freddie Mac loans
.
two years for Veterans Affairs loans
.
Can a mortgage company refuse payment?
Mortgage lenders don't refuse payments from borrowers in good account standing
. If you can't convince your mortgage lender to accept payments from you, and your loan is in danger of default, you may need to speak with a qualified attorney to discuss your options.
Can I just walk away from my mortgage?
After all, California is one of the non-recourse states. Financially, it makes sense, especially if you've put very little down. Legally,
you have every right to walk away as well
. After all, the banks performed due diligence and made the decision to lend you money.
What is a friendly foreclosure?
The Friendly Foreclosure Strategy is
a partnership between homeowners and investors
. … The homeowner agrees to pay the investor rent after the foreclosure auction until they (or a family member) can obtain a new mortgage to buy the home back from the investor at market value.
How will foreclosure affect my taxes?
Foreclosure Tax Consequences
Often, the Internal Revenue Service (IRS) considers
debt that's forgiven by a lender
because of foreclosure to be taxable income. … Because the IRS is waiving taxation of forgiven mortgage debt, any income tax refund isn't affected by your foreclosure.
Do banks really want to foreclose?
Consider the main motivating factor for a bank to be in business. It is not to provide a service to the general public; they are in business to make money. In a foreclosure case, they will most likely lose money. … Remember:
The bank does not want to foreclose your property
.
