In 1999, I purchased a mobile home. The cost originally was about $54,000. I paid faithfully on my loan until May of 2007 when I gave the property up for foreclosure. Basically, I paid close to $45,000 into my loan. I got a notice many months after the foreclosure that they had sold the house for $13,000, and, low-and-behold, that was the EXACT amount that was needed to make repairs on the house. Since then I have been notified several times that I still owe $43,000 on this loan. Now, correct me if I'm wrong. If I let a car be repossessed, the bank would resell it and hold me accountable for any amount I owed above the sale price. What's the deal with the house thing? They got the house back, and it was not my decision to sell it for only $13,000. I'm being threatened with a lawsuit, but I feel this is ridiculous. If I could have continued to pay on the house, I would have after doing it for 8 years! There is no way I could pay a judgment now! Help.....
Mags
2011-03-08T14:07:30Z
I would like to add that the reason I lost my house was that a nice man walked out on me leaving me with all the bills after I had raised his kids and grandkids. So, my dear, it was not just a point of walking away from a promise, it was a matter of almost being homeless. I am a disabled senior citizen living on a fixed income. Do not be so quick to judge........
Dee in CO2011-03-08T12:54:31Z
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It's too bad that you didn't understand home loans better before you walked away from your mobile home. You would have been better off selling it than letting it foreclose.
When you get a home loan, you agree to pay it back over a certain number of years at a certain interest rate. The first year you pay, it's almost all interest. After that, with each year you pay a bit more of the principal, but not much.
The bank took possession of you mobile home and sold it at auction. A lot of people who want to invest in things like this can really take advantage. Someone got a real steal, but it was you that got robbed.
The piece you are missing -- so to speak -- is that "giving up the property" does not in fact free you from the agreement (loan) you signed to buy it. Car or house. In most states.
If the house was worth more than $13,000 the law says it is YOUR responsibility to arrange that sale, instead you chose to walk away.
In most cases -- state laws differ -- your mortgage paperwork will say something like "I am responsible for any remaining debt in the event that foreclosure sale does not bring enough money to pay off any remaining balance."
Ridiculous, my dear, is thinking so little of your word that you feel you can just walk away from a promise anytime you want, regardless of the financial harm you may do to someone else.
How long was this loan? You only paid on it for 8 years, so what was the payoff (look at your last loan statement).
Most of the money you paid for that 8 years was applied to interest, not principal. Look at the payoff, subtract $13,000 and you will have what you owe.
This is one reason why you don't finance depreciating assets (like cars and trailer houses).
the loan company is not doing anything different then if it was a car. your house got deposed, they sold the house, you have to pay the difference between what you borrowed for the house and what they sold the house. BUT that also includes interest as it continued to get added on when your turned the house over to the bank, and any costs and fees associated with them foreclosing on you and the costs of selling, plus having to collect from you.
I'm sorry to hear your story! I have had family members go through similar events, and in some states, technically, I believe the mortgage company does have the right to collect the difference between the forclosure amount received and the balance of the loan.
If you can prove that the home is worth substantially more than $13,000, I would try to argue that. It sounds like the mortgage company didn't take into consideration how much you owed and try to work with you.