If you are behind on your mortgage payments your mortgage holder will probably start foreclosure proceedings against you. If you are unable to defend the foreclosure your home will be scheduled for foreclosure sale. There are a lot of misperceptions about these sales and many homeowners believe the sale is the final step in the matter and nothing further can happen afterwards. In some cases this is true, but in others there is a different result. It is helpful to know what to expect if your house is sold at foreclosure so you don’t have a surprise down the road.
One of the most frequently asked questions about the sale of a home in a foreclosure is where the money comes from, and where it goes after the sale is final. The logistics of the funding for a property sold at foreclosure sale typically go along these lines:
- When the lender gets the property back at the sale no real money is paid. The bid is what is called a credit on the judgment obtained and the lender does not have to pay for the property because they have a judgment.
- If a third party does buy the home at the sale the sales proceeds are given to the lender. This is after any taxes and any other fees are paid.
- In the rare event there are excess funds after these payments are made, the borrower is entitled to those funds.
This process leads many to question how a lender comes up with their bid amount, and if it is fair for the lender to start the bidding. Another issue that creates a lot of curiosity about the process is what happens to the property after the sale. If the home went back to the mortgage company they will remarket that property, but the sales price will be used to determine if there is any deficiency still owed by the borrower. If there is a deficiency the lender might take steps to try and collect from the homeowner. You can challenge the valuation and the process, but you have to act fast. If you are concerned you still owe your mortgage lender after a foreclosure sale has taken place, call us for an analysis of what happened in your case.
For more information about foreclosure sales, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.
