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Profits from Repossesion
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Shaz12_2
Posts: 1 Newbie
A friend of mine recently told me that banks/building societies make alot of money from repossesions and thats how they are profitable. Any truth in that?
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Nope. They recover the amount originally lent plus the costs accrued. If any is left, it is returned to the original owner."Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100
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Yep. If there's any profit, it's returned to the owner. If there's any loss, they can chase the owner for the shorfall. Either way, they really only get the amount of the mortgage, plus any fees/charges.poppy100
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If you read some posts, you will see that sometimes the price achieved for a repo doesn't cover the amount of the loan outstanding. Mortgage lenders should only recover this figure plus reasonable costs.If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales0
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Nope, completely wrong. There's a reason lenders do credit checks, check affordability,income multiples and so forth. They are hoping you won't default on your mortgage and have to reposses. Lender's are not in the repo business and certainly don't profit from it, they are there to lend money and collect interest for the whole term. Reposessions can get drawn out and messy and the lender will usually offer many options to remedy any financial problems before things get that bad. Also when a lender reposseses, they will usually flog the property at auction where they are unlikely to receive full market value. They do this to get a quick sale, they are in the loaning business after all and want to quickly recoup the debt and loan it out again. Also if someone is in negative equity, especially true in a declining market, the lender may not recoup its original investment and may also lose money. Some offset this risk by purchasing a mortgage indemnity guarantee though. All in all, a lender will only make its maximum profit if you pay your mortgage for the full term and its in their best interest to make sure that happens.0
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Any defecit on land or property mortgages will be chased for 12 years.0
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The bank has to hand over any money left from the sale after the payment or the mortgage and any other loans secured on the property, and after they have deducted their fees and charges.
So basically you're chance of seeing any moeny back is 4/5ths of 27% of sod-all.
Inspection fees.
Daily Holding fees.
Overdue fees.
Missed payment fees.
High-rate intrest.
Nose-picking fees.
Anything they like fees.
All bank fees are (near enough) 100% profit as most bank processes are fully automated.Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.0 -
Either way, they really only get the amount of the mortgage, plus any fees/charges.
Plus quite a lot of fees and charges, usually!...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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