SkyPig Posted December 3, 2010 Share Posted December 3, 2010 Situation: Out of work, behind on mortgage payments three months, broke. $70K equity in the house, but no one will let me borrow against it, since I'm out of work. It's enough to pay-off the outstanding balance.Question: If the mortgage company forecloses on my house and sells it out from under me, do I get the profits from that equity after they pay off the loan and deduct their expenses? Link to comment Share on other sites More sharing options...
RedScare Posted December 3, 2010 Share Posted December 3, 2010 Situation: Out of work, behind on mortgage payments three months, broke. $70K equity in the house, but no one will let me borrow against it, since I'm out of work. It's enough to pay-off the outstanding balance.Question: If the mortgage company forecloses on my house and sells it out from under me, do I get the profits from that equity after they pay off the loan and deduct their expenses?Yes, but why would you let them foreclose and run up a tab? Plus, the foreclosure sale will likely not get close to what your house is worth, so you are liable not to get much, if anything from the foreclosure. You should have that house on the market tomorrow. Set the sale price a bit less than it's worth for a quicker sale. Link to comment Share on other sites More sharing options...
SkyPig Posted December 4, 2010 Author Share Posted December 4, 2010 Well, I'm hoping to find another job soon, and then the mortgage company will work with me to reduce my payments or make up the shortage ("forbearance"). But that may not happen soon - there's no way to know how long it's going to take. And I don't want to sell early, if it turns out to be unnecessary. So it's a race between finding a job, and how long the mortgage company is going to tolerate the situation. I'm just wondering what happens in the worst case scenario. I couldn't imagine that the mortgage company would get to steal the profit from my 13 years of on-time payments and all the equity I've built up during that time. Glad to hear that isn't allowed... Link to comment Share on other sites More sharing options...
RedScare Posted December 4, 2010 Share Posted December 4, 2010 The mortgage company doesn't get to take your equity, but if the bid is only as high as what is owed, you lose all of the equity. And the mortgage company could be the only bidder, in which case they WOULD get all of your equity. Link to comment Share on other sites More sharing options...
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