While most homes at auction sell for less than what is owed on the mortgage, sometimes the bank sells a house for more than what is owed.
There’s no way to tell what will happen at the public sale and/or auction. But if the bank sells your house for more than you owe, you may be able to get some money back after the transfer of ownership at the closing, even if your house was in foreclosure.
The amount to which you'd be entitled would be determined after the mortgage loan is paid off and all expenses and costs associated with the sale are deducted — including attorney fees, foreclosure fees, real estate taxes and any municipal bills (water and sewer) that may be overdue. The extra money would also go toward paying any other mortgages you have.
Once those costs are determined, you have a right to ask for the remaining money, and an attorney can help you go about this the right way to increase your chances of success.
Be aware you may have to pay taxes on what you receive, as determined by the Internal Revenue Service (IRS).
Also, if you're entitled to any money back, it will take a while for all of the paperwork to get done and everything to be paid off, so it’s in your best interest not to count on getting the money until you actually have it in your hands.
Don't forget, you don't have to lose your home to foreclosure. There are usually other options. If you want to prevent losing your home in foreclosure, bankruptcy might be a good choice for your situation.
Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.