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If it goes into foreclosure, the creditor would gain ownership.
"I've heard estimates that mortgage investors lose 40to50percentent on their investment if it goes into foreclosure".
When a building goes into foreclosure, a judge appoints a lawyer as a receiver who acts a property's temporary landlord during the process.
If a house purchased with a cash-back transaction goes into foreclosure, it is soon discovered that the home is worth less than the value of the loan.
And, as we have seen in the current crisis, these servicers aren't doing that, as house after house goes into foreclosure.
Such a reduction would cause a loss for the original lender, but that loss might be smaller than it would be with the alternative: the house goes into foreclosure.
Similar(38)
The property went into foreclosure.
Then the property went into foreclosure.
Soon thereafter, the building went into foreclosure.
Then his house went into foreclosure.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com