Forum Post: when bank reposseses house do they collect insurance on whats owed on house
Posted 11 years ago on May 29, 2012, 9:58 p.m. EST by know1
(210)
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why else would they take back a house that ,say, 170,000 is owed on and sell it for 20,000
Catherine Austin Fitts tells us exactly why its happening from her experience as Assistant Secretary of Housing during George H.W. Bush. No-one else has come out with first hand information like this. She should run for president !
http://occupywallst.org/forum/assistant-sec-of-housing-catherine-austin-fitts-bl/
As opposed to not taking it back and collecting nothing?
btw, are there really homes with 170k mortgages being sold for 20k?
your second question, Yes. Your first Q, as opposed to cutting morgage in half
If the bank were to begin cutting mortgages in half for those that are in trouble then no one would pay their mortgage fully knowing that soon it will be cut in half. Soon houses would start selling for double what people could afford to pay for them because they know that they would only have to pay half the mortgage.
and the bank didnt even get the 20,000 there were many expences, they basicly got nothing
They sell it for whatever they can get. Banks don't like owning houses, so they try to cut their losses, get back what they can and put the transaction behind them. Lots of times, they lose money on the deal. Too many foreclosures will wreck a bank because of the losses. They don't get insurance payments.
r u sure, why did AIG get bailed out for so much
no but they can write if off as a loss on taxes.. thats 170000 reduction in income for them.
above
Take it from me, writing off losses is a bad business model, to be avoided at all costs if you can. You do it when you have to, but not paying taxes on losses is a far cry from actually making money. It just means you're losing less.
the question was why do they do take a home ..not how they get rich doing it.