What happens if the bank takes possession after foreclosure?
When the bank takes over the property the REO agent assigned to the property lists the property for sale. The properties are sold for under market value in order to get them off of the books. After the home is sold, a deficiency judgment is granted for the balance on the loan at sale date less the amount that the home sold for in foreclosure, plus all costs, penalties and fees. This is billed to the foreclosed homeowner. That person’s credit is then ruined by a foreclosure being added to their credit report, making it near impossible to get another home loan for a very long time.
