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The amount that the bank forgave the difference from what you owed and the house is worth will be issued to you on a 1090 form and you will owe tax on that amount.

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Q: What happens to the remaining mortgage balance if your house is foreclosed on and sold for less than the balance of the mortgage?
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What happens if you haven't paid the remaining balance after the repossession?

"remaining balance" as in what you are behind OR the remaining balance due on the loan??


What happens to second mortgage if first mortgage is foreclosed?

If the first mortgage is foreclosed the second mortgage lien gets wiped off the property by the foreclosure so the property can be sold free and clear of the second mortgage. However, the mortgagor still owes the debt to the lender and the lender can pursue collection of the amount due by a civil lawsuit.


What happens to the first mortgage when the second mortgage forecloses?

AnswerThe first mortgage would have the first position on the lien. So if the second mortgage company foreclosed on the property - they would sell the property and the sale proceeds must go to pay off the first mortgage company first. Then, if there is anything left over, that money goes to the second mortgage company.For example, there is a first mortgage of 100,000 and a second mortgage of 40,000. The property is foreclosed and sold for 125,000. The first mortgage gets paid off (100,000) and the second mortgage company gets the remaining 25,000.The property owner still owes the second mortgage company the other 15,000.--------------------------------------------------------------------------------------------------------------Not true. Maybe different laws in different states but here the 2nd mortgage foreclosure sale does not directly effect the 1st mortgage. It remains a lien.


What happens if the partner on the mortgage loan moves out nd stops paying?

The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.


What happens when your home forecloses and the lender sells it for less than what you owe?

You still owe the balance (the amount you owed minus the amount the lender sold the foreclosed home for).

Related questions

Your home recently foreclosed you had a first and second loan The first loan handled the foreclosure487k now you are left with the second loan 117K What happens now?

When your home is foreclosed on, the first or second can start the process. If you have a first mortgage and a second mortgage, your first mortgage is the first lien holder. Therefore if the second was first to foreclose they would have to pay the balance or negotiate the balance (agree to lower payoff). When a home is foreclosed on, all debts against the home are extinguished.Normally in a foreclosure the first mortgage will not negotiate with the second mortgage, in this instance the second mortgage would be out of the picture. VALUE (appraisal) plays a huge role in this process.


What happens if you haven't paid the remaining balance after the repossession?

"remaining balance" as in what you are behind OR the remaining balance due on the loan??


What happens to second mortgage if first mortgage is foreclosed?

If the first mortgage is foreclosed the second mortgage lien gets wiped off the property by the foreclosure so the property can be sold free and clear of the second mortgage. However, the mortgagor still owes the debt to the lender and the lender can pursue collection of the amount due by a civil lawsuit.


What happens to the first mortgage when the second mortgage forecloses?

AnswerThe first mortgage would have the first position on the lien. So if the second mortgage company foreclosed on the property - they would sell the property and the sale proceeds must go to pay off the first mortgage company first. Then, if there is anything left over, that money goes to the second mortgage company.For example, there is a first mortgage of 100,000 and a second mortgage of 40,000. The property is foreclosed and sold for 125,000. The first mortgage gets paid off (100,000) and the second mortgage company gets the remaining 25,000.The property owner still owes the second mortgage company the other 15,000.--------------------------------------------------------------------------------------------------------------Not true. Maybe different laws in different states but here the 2nd mortgage foreclosure sale does not directly effect the 1st mortgage. It remains a lien.


What happens when the sole owner of a house with an upside down mortgage dies and there is a trust with heirs?

Generally, either the mortgage must be paid or the bank will take possession of the property, sell it, and after deducting the balance due on the loan and all the associated costs and expenses will pay over any balance remaining from the sale to the estate. However, you should review any documents associated with the reverse mortgage for the terms of that transaction.


If your mother dies without a will and owns a house with a debt what happens?

If she had insurance to cover the balance owed, then the debt could be eliminated and the Probate judge will consider ownership according to remaining heirs- husband and children. If she did not leave money to pay the balance, the mortgage holder may or may not allow you to assume the loan, depending on your personal credit record. The mortgage company may exercise an option to repossess the property if the heirs can not pay off the remaining note.


What happens when your home is in foreclosure and you have an equity line of credit on this home?

The line of credit is no longer usable and the bank that gave you the line of equity will be asking you to pay the balance. The mortgage holder will also be asking for the deficiency after the foreclosure auction. Alternatively, the banks may send you a 1099 early next year so you will owe taxes on the "forgiven" balance. Get a good bankruptcy lawyer. The law may change in this area when Congress comes back into session.


What happens if the partner on the mortgage loan moves out nd stops paying?

The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.The remaining co-signer would be stuck paying the mortgage or the lender will take possession of the property by foreclosure.


What happens if you can't pay any remaining balance on a repossessed car and do not have a job?

The car will be sold at auction. Whatever it sells for at auction will be deducted from the balance remaining. The credit company may initially offer to accept a reduced amount on the balance, but, if you're unable to pay that, they will turn it over to collections for the full amount of the balance remaining.


What happens when your home forecloses and the lender sells it for less than what you owe?

You still owe the balance (the amount you owed minus the amount the lender sold the foreclosed home for).


If your house is foreclosed on what happens if you get a personal lender and get a new house Can they put a lien on the new house?

Check the laws in your state, but NO, they cannot. Your old house secures the mortgage on THAT house. Nothing else.


Does a short sale happen when I stop making mortgage payments?

No. A foreclosure is what happens when you stop making mortgage payments. A short sale must be discussed and negotiated with the lender. In that case the lender agrees to accept the proceeds of a sale of the property even if they fall short of what is owed on the mortgage. They agree to forgive any remaining balance on the loan. It is a way to avoid a foreclosure. Not all lenders will agree to a short sale.