When a property that was repossessed by the bank finally sells, clearly the bank will get what is owed to them however, where does the surplus money (if any) from the sale go?

I was under the impression this would go to the person who was repossessed? A fellow forum member is adamant that is goes to the bank.

I would be grateful if anyone can shed any light please. Thanks!

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After ALL cost including legal and Disposal costs the surplus will go the person who was repossessed

I agree with Gary. The money belongs to the vendor and any surplus goes to him. Banks would not have it any other way after all the bad publicity they attracted in early 90s.

Pankaj

Cheers Gary / Pankaj for your responses.

I knew I was right!!

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Now about that drink you promised, Ramnik....

Whilst any excess money goes to the homeowner, they are also liable in the event of a shortfall. They can and will be chased singly and/ or jointly for 12 years for repayment. The reposession/shortfall process allows attachment of earnings and charges on any future dwellings they may own, subject to additional court proceedings and associated costs.

It is also of interest to note that until the date of exchange of contracts with new buyer, the repossessed homeowner may pay the arrears and mortgage interest to date and reclaim their home or secure their own sale (subject to covering lenders total debt).

The lender will charge for everything, an average reposession costs £7k-£8k

If vendors property is to be sold at auction, they can bid for it and buy it back (subject to funds being available), they can even buy their home back through the lenders EA subject to a mortgage being in place etc.

Never give up on rescuing repossessed houses if they had 20% equity or more.

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Very interesting Phillip. Thanks for that!

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