That's not quite the way it works. The bank will foreclose, and sell
your home - possibly at auction.
The bank keeps the amount outstanding on the loan plus expenses, etc.
The rest goes to you.
Unfortunately, the bank doesn't have an incentive to get the best
possible price for the home - all they need to do is get the
outstanding loan balance. So, often times, the home end up being sold
for far less than it could have brought, either through apathy or
This is why you're usually much better off selling the home yourself,
if you can, prior to foreclosure.
But, the main point is that the bank IS NOT entitled to all your
equite just because they foreclose - only the amount they're still
owed on the loan.
But the reality is that, if you miss payments or, for tha matter, don't
pay the taxes on time, you're evicted and lose whatever equity might have
When I lived is SC in the 80's, the same was true of vehicles - you had
to pay taxes every year on your car. No tax payment, they take the car.
It's hard for me to think that I truely own something, if paments
continue forever (taxes)...
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