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01-18-2008, 12:05 PM
| | Junior Member | | Join Date: Jan 2008
Posts: 26
| | | Foreclosed Price and Market Price?
What is the name of your state? NY
If a house has been foreclosed, then is put on the market to be sold (by a realtor), is the bank being paid twice? The foreclosure sale and again when it sells from a realtor??
Example: if a home has been foreclosed on for 366K but now is on the market to be sold by a realtor with a list price of 268K, what is the difference between the 2 prices, the foreclosure price and the new list price?? How does the bank make back their money that you took out loans on??? From the foreclosure sale, the price it's put back on the market for or both?
The bank now owns the house. The house was foreclosed (government sale) and there's a price associated with that government sale, what exactly does that price mean? |
01-18-2008, 12:18 PM
| | Senior Member | | Join Date: May 2000 Location: Catatonic State
Posts: 71,241
| | Quote:
Originally Posted by Momio32  What is the name of your state? NY
If a house has been foreclosed, then is put on the market to be sold (by a realtor), is the bank being paid twice? The foreclosure sale and again when it sells from a realtor??
**A: the bank is not "paid" at all.
************
Example: if a home has been foreclosed on for 366K but now is on the market to be sold by a realtor with a list price of 268K, what is the difference between the 2 prices, the foreclosure price and the new list price?? How does the bank make back their money that you took out loans on??? From the foreclosure sale, the price it's put back on the market for or both?
The bank now owns the house. The house was foreclosed (government sale) and there's a price associated with that government sale, what exactly does that price mean? |
**A: read up on the word foreclosure and the process. |
01-18-2008, 12:22 PM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,251
| | | If the bank holding the mortgage buys the house back at the sheriff's sale (this happens the majority of the time), they don't actually write a check to themselves. They are there to keep the bidding going until either someone outbids them (and they receive the amount they are out) or they themselves will end up owning the real estate. Once the house sells, if there is a surplus (more paid than what is owed), the balance goes back to the person who defaulted on the mortgage (very unusual). If there is a deficit, the bank can still try to come after the person who defaulted on the mortgage. If the bank is the one who get the winning bid, they then put the real estate into a Realtors hand to try to sell (still trying to recoup their losses). This property becomes an REO, or real estate owned, lender owned, bank owned, etc.
The bank doesn't get paid until the house is bought by some either at the sheriff's sale, or after it becomes an REO. So no, they don't ever get paid twice. Everything is above board. They usually end up losing money on the deal.  |
01-18-2008, 12:24 PM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,251
| | | Sorry, HG, I was typing while you were posting . . . |
01-18-2008, 12:26 PM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,251
| | Quote:
Originally Posted by Momio32 How does the bank make back their money that you took out loans on??? | They don't. They lose. And can still come after you to pay back. Foreclosure is not the answer people often think it is. |
01-18-2008, 12:40 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,006
| | Quote: |
They don't. They lose. And can still come after you to pay back.
| If their winning bid is enough to pay themselves off, there's no deficiency to pursue the borrower. If they let it sell for less than what they have in it, then yes, there is a deficiency.
The foreclosure price does set the market value for that instant in time. |
01-18-2008, 01:16 PM
| | Junior Member | | Join Date: Jan 2008
Posts: 26
| | | Thank you LindaP! You clarified alot. I'm sorry if my questions are confusing or sound stupid, but it's just that this is all new to me and confusing. But I now understand what happened and what is going on, thanks again. |
01-18-2008, 07:31 PM
| | Senior Member | | Join Date: Oct 2005 Location: Ohio (southwest)
Posts: 2,251
| | | You are welcome!
Thanks 4 happy customers!
BTW - the bill is in the mail . . . |
01-18-2008, 08:05 PM
| | Senior Member | | Join Date: Jan 2003
Posts: 17,307
| | | Unless there was a lot of equity, it's usually a loss for the bank.
Example of expenses:
Attorney fees.
Court fees.
Transfer Tax.
Title costs.
Re-keying and securing the property.
Eviction costs on occupied properties
Selling costs (broker fees, closing fees)
Holding costs (taxes, utilities, snow removal, grass cutting, clean out, municipal fines for prior owner code violations or non-permit work. Prior year unpaid taxes or special assessments. Repairs to trashed properties)
Loss of interest.
Salaries and related costs for the people who must deal with borrowers and the properties in default.
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