When banks od building society repocess a home,they sell it

elangarreg · Guest

Do they then pay what they might have gained in the price of the repocessed home to whoever they may have lent the money,and what if the time left for mortgauge repayments had come down to with just a one year of payments to be paid?

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sunflora · Guest

They sell the house on, usually at an auction and so long as they get the money that is owed on the property they aren't bothered who they sell it to or what they get. Therefore if a house was repossessed and there was say £50k remaining on the mortgage, that is the minimum they would sell it for, including costs. It wouldn't matter how much time was left of the mortgage repayments...

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Twisted_Ace · Guest

When a bank or building society repossess your home, you will get nothing back no matter how much they sell it for.

If the property sells for less than you owe on the mortage (negative equity), they have up to 6 years to take you to court to force you to repay the difference. This is known as a C.C.J. (County Court Judgement).

Your mortgage is cancelled on the date of repossession. You will find that obtaining a new mortgage will be very difficult for at least 5 years.

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Duffer · Guest

Repossessed property of any description has to be sold for the best price that the seller can obtain, that is commonly why they sell at auction. They are under a legal duty to mitigate their loss or you could raise their failure to do so as a legal defence to any action brought against you for a shortfall. Don't think that a lender likes losing money any more than you. After all, if they need to claim a shortfall from you they are uncertain to obtain it, bearing in mind that they had to repossess in the first place, usually for non-payment. (no offence intended). The courts view any sale price very carefully, but an auction is generally the indicator of the market at the time. The auction House is independent of the seller, and the price depends on who is in the room, or on the phone. It is also very dependent on condition and location of the property.

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raysor · Guest

As I understand it this is different in US and UK. In US the mortgagor sells the house and that's: whether there is a shortfalkl on the mortgage or not (there wouldn't be a profit would there? In the UK the house is sold and any shortfall is still owed by the borrower.
Duffer sounds a bit naieve to me; I bet some estate agents pick up some good bargains here.

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