A question that can cause a fiery debate but it only leaves one correct answer.

Once a bank forecloses on a property and was able to sell the property for more than the loan owed, the profit is readily handed over to the defaulted owner. Then again, the certain fees or expenses of the bank would have to be collected as well. So the loan and fees would be collected and remaining amount returned to the owner.

Some would be:

  • Late Fees
  • Back Payments
  • Attorney Fees
  • Trustee Fees
  • Sign Fees
  • Closing Fees
  • Newspaper Publication Fees
  • Escrow Issues
  • Realtor Commissions
  • Back and Current Taxes
  • Back and Current HOA
  • Clean Out and Repair Fees

Therefore to conclude, if the property actually cost more than the loan, owners wouldn’t be allowing banks foreclose on their property. They would be selling it to save their credit.

Banks just don’t profit on foreclosures.

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