Question

I foreclosed on my house last year and the bank sold it for more than we owed,but say we still owe everything?

They sold it for about $12k more than what we owed. We were told we'd even get any extra money back. But now, they say even since they sold it, we owe them every cent from the foreclosure. Can they do that?
So, say for example, I owe $100K on a $200k house, I go into foreclosure...They sell for $150k...They still have to rights to get the $100k from me? I still owe them that money? I understand it would go onto my credit report, but to think that I still owe them $100k...It's all win/win for the industry! They don't need a bailout, they just need to sell those homes for a profit like they did with mine.....and still take money from me.
Yeah, they say I owe exactly what they said I owed the day I walked out of the house...with the lawyer, auction, others fees included. They were pretty clear about it. My worry is that the 1099 says I am still liable for all of that debt. I think that since they sold it the amount should reflect what I would owe, say after the last sale and extra fees. I honestly think I'd owe about $15k with real estate fees and such......but not the full amount!
Okay, consulted a lawyer...you all in Maryland anyways this goes:
The difference between what they lost during the transaction is what I should have received on the 1099. The not-so-gentleman at the bank basically wanted to give the big "Push Back" so that the bank could write it all off. They were wrong. I am liable for the amount they lost and have to record that as a gain in my taxes this year. But if I push back with knowledge as ammo, I may get the correct form in time to file my taxes. The hope is that I do not need to fork out a retainer's fee to do this to the fine gentleman who spoke with me moments ago. I hope this clears it up for me and for anyone else being given the pinch by the banking industry. Also, new laws that went into effect in the last moments of the last presidential administration allow for the amount still owed to not affect your taxes. They are forgiven as part of the relief package put into place.
We did some research and found that the bank bought the house at auction went it went to foreclosure for more than I owed. If there were any money's owed by me or money owed to me, it should have been handled right then and there.
What they do with it after the fact is none of my concern and I should not get a 1099 based on any of their losses. I have talked to a lawyer and will fight this in court. But it gets better! Because it may cause quite a media stir, the attorney is doing it for free. We are filing a civil suit for defamation of character. Your credit report is part of your character and thus a huge deal. My wife and I did the math and they owed us $8754.26 after the home was sold at auction. The auction sale is the stopping point. Any fees that are created because they had to sell the house are their issue, not mine. Remember, as of the end of the auction....I was no longer the owner. THEY pay the fees...it's their house now!
People, fight the banks! Don't let them win!

5 years ago - 7 answers

Best Answer

Chosen by Asker

If the bank foreclosed on your house and a sale produce more than the loan you had on the property plus any attorney and foreclosure fees and real estate sales commission then you are entitled to the overage. This is normal and often the case.

Most house that are foreclosed on do not normally exceed the loan amount thus the bank have to take a loss on the property. If the bank has a loss, the IRS has came to the conclusion that someone had a gain. Since you lived in the house prior to the foreclosure the IRS has come to the conclusion that you had the gain.

The lender will send you a 1099 indicating this gain. You will have to pay federal taxes based on this gain.

You should contact a tax consultant upon receipt of this 1099 from your former lender.

I hope this has been of some use to you, good luck.

"FIGHT ON"

5 years ago

Other Answers

In a foreclosure you forfit all rights to the property or any equity in the property.

by physicist - 5 years ago

Once the lender took title to property you get zero even if they can sell it for more than loan. It was their house at that point.

You can bet they sold it after expenses for less than you owed. Their costs to sell the home were far in excess of $12,000. I think legally they can come after you for the differnece, but that is very unusual.

They sure cannot come after you for your entire loan balance.

by David Z - 5 years ago

There are 2 transactions here.

1. the bank foreclosed, which means they became the owner of the house. At this point, almost all the time there is going to be a loss for the bank. They would never take it back for more then you owe. Plus you have late payments, late fees and lawyer fees AND the amount of the loan. This is what you owe the bank.

2. Now the bank is the actual owner of the property. What ever they sell it for, profit or loss doesn't effect you.

TALK WITH A LAWYER.

by Real Estate Guy - 5 years ago

Your additional details section is all wrong. But that is not the case here. Maybe you think they sold it for $12K more than you owed, but as has already been pointed out here there are a LOT of expenses involved in processing a foreclosure. What exactly are they saying you owe? Not the amount of the full mortgage, I'm sure.

by HEATHER - 5 years ago

We had perfect credit before my husband lost his job, while I was pregnant. We had to move to a different state for a job and were forced to let the house go into foreclosure. We had to file for bankruptcy in order to keep from paying a "deficiency judgment". I can't imagine being forced to still pay off the loan! Good luck.

by Olivia - 5 years ago

glad you got an answer from the attorney.

by DeeDee - 5 years ago