Who get the leftover


#1

Sean,
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?? first off i want to say thanks, this website is awesome, and it has helped me make quite a bit of money of late. i have one question:
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example - homeowner is being foreclosed on a 1st TD, there is nothing else recorded on the property. The first loan is about 110k and it will easily sell for 150k to an investor at auction. What happens to the extra 40k. I heard that it goes back to the homeowner that lost the house. That seems to make sense to me, but i had never heard that before. so, in some rare cases, it may be beneficial for the homeowner to actually let the home go to sale.
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quick question - the benificiary on this example has been the one postponing the auction. why would he do this? he is a local wealthy business man, why would he care how he gets his money? he will get the same if it goes to sale, as he would if the homeowner finds a buyer for the home and sells it, right?
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thanks, keep up all the great work!!!


#2

In the rare event that there is any monies left over it does go back to the home owner.? This does not happen often.? It all depends how much money the owner put into the property in most cases it is a large loss for letting the home go.?


#3

Thanks anonymous. There actually used to be leftover money pretty often when the market was stronger, but your are right that it is rare these days. In the case above it would go to the homeowner, but if there was a junior lien it would go there first. Bottom line is that the bank doesn’t get it, and that it continues to pay out the senior most liens with whatever is left over going to the homeowner.