Return to the Household Finances Forum | Post a Follow-Up

 o
Homebuyer walking away when house price down, net equity zero ..

Posted by joyfulguy (My Page) on
Fri, Aug 10, 07 at 6:32

... in most cases will be in for a surprise.

When the bank repossesses, then advertises the property for sale, if the value has gone down even farther, and they sell it for less than is owing ...

... they'll usually chase to buyer for the difference.

Suppose the mortgage was for $140,000. and they end up with $120,000. net on the sale, after the costs involved ...

... they'll be telling the former owner that s/he owes them $20,000.

ole joyful


Follow-Up Postings:

 o
RE: Homebuyer walking away when house price down, net equity zero

I know of someone who had a similar situation, but it was with a car.

It was repossessed out of their drive in the night. Months later they were hunted down to pay the difference between what was owed and what the finance company was able to get out of it. The person who had had it repossessed sure didn't think this was 'right' since they no longer even had the car...but then again a lot of what they 'thought' wasn't right. They asked a friend if they 'had' to pay it. Friends reply was that they should pay it, or end up being sued for it.

Sue


 o
RE: Maxine says it all

I just love this Maxine funny and thought it appropriate of what some folks 'think' they know when making so many bad financial decisions.

Photo Sharing and Video Hosting at Photobucket


 o
RE: Homebuyer walking away when house price down, net equity zero

Many purchase mortgages are non recourse.
Here in CA all purchase mortgages for owner occupied homes are non recourse. There is no liability.


 o
RE: Homebuyer walking away when house price down, net equity zero

In other states it would depend on what the homeowner could negotiate or what the loan documents say. Negtiation is important as is knowing your state law. Also any other debt would be unsecured (unless the loan says otherwise and it served as additional collateral). So the bank would have to go after it through the courts, it would not be automatic. Since the homeowner is already underwater, it would be beating a dead horse


 o
RE: Homebuyer walking away when house price down, net equity zer

This originated with Cramer on CNBC, please note he is a graduate of Harvard Law School. More importantly, CNBC has in house attorneys which while I would assume are not happy with this advice, did nothing to retract it


 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!


Return to the Household Finances Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Please review our Rules of Play before posting.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.


Learn more about in-text links on this page here