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Originally Posted by findtom
Is that really true?? So the bank gives you $100K to buy a house. You default on the loan, and they manage to get $75K in forclosure... they just forget about the $25K still owing?
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Also to give you an example.
10 years ago John buys a house - Im not going to tell you how much the house cost because it is irrelivant. What I will tell you is the Final mortgage balance after a 30 year Note.
John ows the bank 100,000 after 30 years, that includes principal/interest.
John owns the house for 15 Years and all of a sudden cant make his payments.
Johns Monthly payments are $277.77 up untill 15 years he has paid the bank a total of almost $50,000.00
John goes into defualt, cant make his mortage payments. The bank puts him in the preforclouser stage (Pre-Forclouser is another topic where you can buy from the owner at a discounted price)
Noone seems to be able to help John come up with 4 months worth of late mortgage payments
The bank Forcloses on the House, the bank now owns the house with a balance of $50,000 Remaining.
Since John bought the house 10 Years ago, lets say. The house is now worth $300,000
The bank sometimes can get lucky and sell it at a sherif auction.
But it is illegal for a bank to make MONEY on a forclosed Proptery
Meaning - John owed the bank $100,000 thats all the bank is allowed to collect. Even in forclouser.
Now this is where I come into play - I as an insider of the bank. Remember no one works for free. I can pay the remaing balance on the home which is $50,000.00 and walk away with the proptery, plus like a fee to the banker who brokered me the home.
I now Own a $300,000.00 home for $50,000 in 80% of cases this home is well kept up and maybe needs some paint here and there.
Now your ready for sale, You just made $250,000.00 and Mr. John is eat from a trash can.
Dont you love this country?