I need some advice. Due to poor financial management in the past and both losing our jobs, our mortgage company foreclosed on us and we had to move last April. Since then, we have both started good jobs and are trying to get back on our feet. We live in a house that belongs to my father and currently pay no rent, although we will start to soon. The house were lost has now been purchased and another family is living in it. The mortgage company is now contacting us telling us that we owe them $70000 (what we owed when we left). I know they didn’t give the house away. Is it true that we should have to pay them the full amt when they sold the house?
You legally owe the difference between the balance you owed (principal) and what they sold it for, plus reasonable fees. You need to find out what they sold it for. That is public record and available at the courthouse.
I cannot tell you what happens if there was a ‘early payoff’ penalty. Good Luck!
Whether or not they sold the home you had, you still owe the loan, because it would be – only for an example – as if I loaned you $150.00 and then had to borrow from a friend to pay my electric bill when you couldn’t pay. Just because that friend paid my bill, it doesn’t stop the fact you borrowed from me and agreed to pay it back. Same with the mortgage company.
Actually, it doesn’t work like the example in the post below. I used to work in the mortgage industry and when a foreclosed home is auctioned off, any money that is realized in the sale by law MUST go straight towards paying off the mortgage. The mortgage co. cannot make money on the sale, plus collect the entire mortgage from the loanholder. Now, if there is a deficiency balance (the difference between the amount of the sale and the amount of the mortgage), the loanholder is still obligated to pay that amount. The mortgage company is also allowed to add on the costs associated with the auction. Like a previous poster said, check the county tax or appraiser records, which are usually available online, and the amount of the sale should be listed. If it were me, I would immediately dispute the amount, in writing, with the mortgage company.