Thursday, October 20, 2011

Foreclosed and Sued - The Double Whammy!

Did you know that forty-one states (Massachusetts??) and the District of Columbia permit lenders to sue borrowers for mortgage debt still left after a foreclosure sale? The banks are simply responding to the serious losses they have had to eat  due to today's battered housing market. This is true because foreclosed homes seldom fetch enough to cover the outstanding loan amount, both because buyers financed so much of the purchase price—up to 100% of it during the housing boom—and because today's foreclosures take place following a four-year decline in values.

The Wall Street Journal covered this phenomena on its online Homes section. Go check it out.

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