Lender Profit Limit on Foreclosure?

LisaK · #1 07-13-2006, 11:11 AM

What is the name of your state? Illinois

Hello - I am wondering if there are any limits to the profit a lender may make on their sale of a foreclosed property? We paid $330,00 for home in 2003. Our mortgage was $295,000. Equity was $36,000. Husband lost job. Judgement amount was $309,000 on 1/31/06. We moved out on 2/28/06. Bank listed home in March '06 for $370,00. House sold/closed in May '06 for $365,000. Taking the difference of $56,000 ($365K sale - $309K judgement) minus taxes due, closing costs, agent fee, and the 4 months between Jan. and May when no payments were being made - a total of roughly $30K - that leaves about $26000 profit plus our equity of about $36,000. It looks to me like the mortgage company made about $60K. More if they did not pay the real estate taxes due at the closing.

I have heard numerous times that mortgage co's lose money on foreclosures. When they listed the home after the foreclosure, I was shocked at the high listing price....we thought they'd list it very low, thus not making a ton of money on it. Now, if it had been on the market for months and months, I could see where they would be losing money or breaking even. But the fast sale (we left the home immaculate and perfect) and the high sale price has me wondering if they are allowed to make so much money off our situation.

Thank you , if anyone has input.

jwolf · #2 07-13-2006, 06:52 PM

Yes.

At least they didn't sell it for less than you owed them and then get a judgement against you for the rest.

LisaK · #3 07-14-2006, 01:49 PM

Quote:

Originally Posted by jwolf

Yes.

At least they didn't sell it for less than you owed them and then get a judgement against you for the rest.

Very helpful - thanks for that valuable insight.

LK

pojo2 · #4 07-14-2006, 05:58 PM

Curious since this property turned around almost instantly why in the heck did you not sell it before the foreclosure. You ALLOWED the foreclosure then condemn the bank because they owned the property and sold it at a bit of a profit? When it foreclosed it belonged to them to sell at what the market would bare you had that chance before they did.

LisaK · #5 07-15-2006, 09:32 AM

No condemnation of the bank here - I just wanted to know if there was any legal limit to profit that could be made. We had to sign a form stating we would not sue them for any reason so we could stay through the end of Feb. When I saw the sale price, I got curious.

Not everyone who posts here is whining about their respective situations or blaming the rest of the world.

Lisa K.