What is bank foreclosure?
Question:
Answer:
When you have a loan on your house you have agreed to meet certain terms in accordance with the loan documents that you signed. If you default on one of these terms (not just quit paying) then the bank has the right to take your house away from you and sell it in order to payoff the debt. They start by trying to collect the loan from you. If you don't pay they then will go to court and obtain a judgement against you. The judgement means that in the eyes of the law your acytions are in the wrong and they have the right to try to collect debt. They will then "attach" the judgement to your house and can forceably remove you from the house. Once they take possession of the house they will then sell it to pay the debt. If the proceeds from the sale are not enough to payoff the debt, then they can still come after you for the "residual" balance.
This means that the bank took your property under a court order that they sought after you didn't make payments in a timely manner. They actually get title to your property, and you have no more rights to this property. You also still owe any difference between what they sell the property for and what you owed.
When you rent a property longterm, then you usually take out a loan from a bank to do so. If you can't pay back the loan or become delinquent in your payments for too long a period, then the bank takes over your property and sells it.
When you can't pay your mortgage and you and the bank fail to agree on a payment scheme, then the bank exercises their right to "own" your house. You move out, they sell the house, and you're left with the remainder of what is left after they repay themselves plus what you owe them, plus what it cost them to sell the home.
Not good, they will sell your house from under you, then again, you may be able to get a house below market value, fix it up and make a profit. But go in smart, have a plant, get professional help. Don't make stupid mistakes.
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