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Twilkes

Bank Repossessions

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This might be a stupid question, but if someone took out a £200k mortgage on a house, had paid off £100k of it by the time they got into financial difficulty and the bank repossessed the house, and the bank then sold it for £150k at auction, would the individual get the £50k difference? Or if your house gets repossessed, that's it, game over, no matter the difference between the house value and the amount outstanding?

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This might be a stupid question, but if someone took out a £200k mortgage on a house, had paid off £100k of it by the time they got into financial difficulty and the bank repossessed the house, and the bank then sold it for £150k at auction, would the individual get the £50k difference? Or if your house gets repossessed, that's it, game over, no matter the difference between the house value and the amount outstanding?

No it isnt a stupid question. It's one I have wondered about myself, but never followed up further. I'm intrigued to know if there is a common answer..

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This might be a stupid question, but if someone took out a £200k mortgage on a house, had paid off £100k of it by the time they got into financial difficulty and the bank repossessed the house, and the bank then sold it for £150k at auction, would the individual get the £50k difference? Or if your house gets repossessed, that's it, game over, no matter the difference between the house value and the amount outstanding?

After selling fees, penalty charges, legal costs...

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After selling fees, penalty charges, legal costs...

Cheers, that's what I thought the answer was, and thanks to the original poster (starter of thread), that was one of those little questions I always wondered about

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After selling fees, penalty charges, legal costs...

"penalty charges" above actual costs have now been rulled illegal

to the OP,yes, the owner gets the rest

tim

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This might be a stupid question, but if someone took out a £200k mortgage on a house, had paid off £100k of it by the time they got into financial difficulty and the bank repossessed the house, and the bank then sold it for £150k at auction, would the individual get the £50k difference? Or if your house gets repossessed, that's it, game over, no matter the difference between the house value and the amount outstanding?

The distribution of funds from a sale by a mortgagee is laid out in the Law of Property Act 1925 at Sec.105. Essentially he must distribute in this manner;

Discharge of any prior incumbrances which the sale is not made subject to (this means any mortgages which rank above that of the mortgage who is in possession);

Discharge of costs, charges and expenses properly incurred in the sale (agents/recievers fee's, etc);

Discharge of the mortgage money;

The residue is to be paid to the person entitled to the mortgaged property or such person who is entitled to give reciepts for it.

So, basically, if there is a balance it goes to the person who mortgaged the house to the bank. You don't lose any balance remaining but can still be pursued of there is a short-fall.

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This might be a stupid question, but if someone took out a £200k mortgage on a house, had paid off £100k of it by the time they got into financial difficulty and the bank repossessed the house, and the bank then sold it for £150k at auction, would the individual get the £50k difference? Or if your house gets repossessed, that's it, game over, no matter the difference between the house value and the amount outstanding?

when I worked for a building society some years back someone did this during the boom - got the mortgage out, never paid it, got repo'd, got a big fat cheque FROM the building society as the value of the property had gone up loads, even after costs

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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