If a house is sold in auction because of not paying the mortgage?
Wednesday, February 10th, 2010 at
10:48 pm
and there is money left over after all the fee’s and fines are paid. Who gets the rest of the money?
I know someone who lost their house due to not paying their mortgage and there is money left after everything was paid for.
Does he get the rest of the money? Isn’t legally his after all his financial obligations are taken care of? Thank You.
Sell and Rent Back
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Tagged with: Financial Obligations • House Auction • House Mortgage
Filed under: houseauction
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Well the best thing is to probably seek legal advice, but I would think that if all finacial obligations were met then your friend would be entitled to the money.
When I was fifteen, our house got auctioned off because my mom couldn’t pay the mortgage. They auctioned my saxophone, our photo albums, the stuff my mom kept of projects and report cards, they took EVERYTHING! My mom even came up with the money to pay it off, but they said it was too late..
It sold for more than asked and my mom didn’t see a dime. People are slime and take as much money as they can get, no matter whos lives they have to ruin.
I feel bad for whoever went through this that you know. Let them know things do get better and I’m sorry for their loss.
Sorry! The mortgage company gets to keep that money.
1st any tax liens would be paid. Then the mortgagor. Then if there was a second mortgage on the loan, they would be paid next. But yes, if there is still money left over, it should go to the former home-owner. Note the mortgagor gets to be paid for all legal fees too.
I would certainly hope the lender isn’t stupid enough to try to keep that extra money. Let me explain;
When a lender forecloses on you and sells the property and gets less than they are owed they go back to court and file for a deficiency judgment against the original borrower for the money they were not able to recover from the sale. Now then what makes anyone think that the former property owner does not have the same right in reverse? ( I think that’s called law of equity)
If that logic doesn’t light the pilot then go see an attorney and ask them to explain the laws in your state and in federal court regarding “Unjust Enrichment”
The former owner is entitled to the surplus. S/he must file a motion (it may be called something else depending on local practice) with the court that ordered the sale to disburse the funds to him/herself. In many jurisdictions the Court Clerk’s office will supply te form. You must do it in person to prove your identity, or through an attorney who will take care of the proof. In some cases the attorney who represented the mortgage company in the foreclosure will prepare the papers for a small fee.
nope failure to pay the dept gives the bank or leander owner ship of the property sorry your shit out of luck.
When a property is foreclosed it is sold on the court steps by the court. The proceeds will be disbursed by the court as well. (This is different from getting a tax deed via a tax sale). If the proceeds is less than the outstanding owned including back interest, expenses and attorney fees, the court will enter a deficiency judgment on you. If there is a surplus, the court will disburse the difference to the property owner.
In realty, rarely would the sales end up with a surplus because
1. The owner is so far behind there is nothing much left.
2. At the same time, the bidders will bid only what the judgment is and not too much above what is owned
3. The lenders will throw in as much expenses and attorney fees in there so that on paper, all the equity is gone.
In a tax sales, it is not unusual to see substantial equity left behind in commercial properties but that is another illusion because the bidders may very well be the former owner who uses tax certificates as a cheap way of financing.
Keep in mind that a lot of fees were added to what may have been the last statement your friend saw. Default fees, Trustee Sale Fees, title transfer fees. junk fees, too, and no way to avoid them by choosing someone else. Not to mention unpaid mortgage interest piling up.
It’s really an unusual situation where you get money back, but if it does happen, talk to the trustee.