pichon asked:


I am house shopping and I would like to know what exactly amount does the bank owe on a house which is bank owned?

Why do people do SHORT SALES?

What are foreclosures?

Al

3 Responses to “How can I find out what the BANK really owes on a house?”

1. Big Deal Maker on March 2nd, 2009 12:06 am

   You can find out what was borrowed on the home thru the county records.
   Get the address to the county recorders office. The name of the owner is not a secret. Nor is the loan amount on the home a secret.
   You can also let your real estate agent find those numbers for you. And that is just a phone call away.
   Foreclosure is when the home owner can no longer pay on the home and the bank forecloses on the home for non payment of the loan. This is filed with there attorney.

2. godged on March 2nd, 2009 11:34 pm

   I’ll play.

   Short sales are still owned by the person that committed to the loan, but they are in trouble and trying to get out of the mortgage. The lender has to approve any contract to purchase.

   Foreclosures are through the process and are now REOs, aka real estate owned, aka lender owned properties. The bank owns these, not the person that committed to the mortgage.

   You cannot find out what the mortgage balance is, this is not public information.

   People do short sales to avoid foreclosure. Many got in WAY above their heads in a loan, not regarding the consequences of buying more house than they could afford, or got into piggy-back loans and other exotics that were just ridiculous ways to buy homes out of their price range.

3. Pat B on March 3rd, 2009 7:28 pm

   Ok, first of all, the bank doesn’t owe anything. It owns the house because it foreclosed on it. You can find the amount that the bank was owed (including foreclosure costs) by getting the property address and then looking up the tax ID number of the home you are interested in and going to your local (normally county) register of deeds office and looking up the Sheriff’s Deed or foreclosure deed. It will have an amount on it. Some counties have this information online, some free, but most of the time you have to pay for the service.

   Short sales are when the owners sell for less than they owe the bank. In these cases, the banks must agree to take the lower amount. The banks may do this to avoid going through the foreclosure process which, in most cases, costs the banks money since often they sell for less than the foreclosure price and in this market where foreclosed homes can sit on the market for some time, they have to pay the taxes, upkeep, realtor commission, advertising, etc.

   This is the simple explanation of a foreclosure. Mr. and Mrs. Smith purchase a home. For some reason, they cannot make their mortgage payments. After their payments are in arrears at least three months, the bank notifies them that they are going to start foreclosure proceedings. (Maybe this is a good time to explain a mortgage. When you take a mortgage, you first sign a note which is basically an IOU, to the bank. The bank then has you sign a mortgage that puts the real estate up as collateral for the note). When they start foreclosure proceedings, they are basically taking the collateral that you put up as a promise you would pay off the note. All states laws are slightly different, but here in Michigan, the foreclosure notice must then be published 5 times in a newspaper. (That foreclosure notice must specify the legal description of the property, the names of the property owners, the bank and the amount owed plus other information). At the end of the publication time, the property is sold on the steps of the county hall or city hall or wherever it specifies in the published notice. So the bank buys the property at the auction for the amount that is owed. There are investors that also buy at Sheriff’s sales, especially if the property in question is worth a lot more than the foreclosure price – in this case, the bank is paid what is owed on the house and the investor owns the property, sort of! Most mortgages have a redemption period after the Sheriff’s sale – in Michigan it is normally 6-12 months. During that period, the owner of the property (not the bank, the original owner) can still continue to live there and can try to sell the property (of course the bank would still have to be paid if there is a sale). At the end of the redemption period, the property reverts to the bank or the investor who bought it at the Sheriff’s auction. There are a lot more that goes along with this, but that is the basic idea of a foreclosure.
   It has become common to call homes that are bank owned “foreclosures” – this is just short for foreclosed properties. Normally when a bank begins to market a property that they own, the property has completely gone through the foreclosure process and the redemption period has elapsed.
   Hopefully that answered your questions.