Cash: $ 4.10
Joined: 10 Aug 2007
|Want to understand about the house mortgage mess
I have seen the mess between borrowers (homeowners) and predatory lenders. This subject is still not clear hoping someone will explain.
Suppose I buy house for 100,000 for simplicity'sake on mortgage. The lender then gives the cash to homebuilder. Now I make monthly mortgage payments on teaser rate to the lender for two years. after two years it is reset to higher rate; becomes unafforable. Now I decide to move out and lose the house by selling it to someone else (new borrower) at a lower price say 80,000 and move to rent an apartment.
Now the borrower makes the remaining monthly payments on teaser rate to the same lender. I understand my loss is 20,000 unless it is the lender's (bank) loss of the amount 20,000. in this case, I understandy why they are predatory. I dont blame them.
My question: Do I have to still pay the remaining 20.000 to the bank or the bank would hound me and grab my collaterals or they assume the responsibility for the loss. I ask this question because now the bank has two borrowers.
I may understand the real mess they are in because it takes time maybe few years to pay back the bank that remaining 20,000.