Sercured Loans

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Buddyric | 23:31 Tue 11th Mar 2014 | Business & Finance
4 Answers
How does a secured loan on a property still remain secure when the property has been repossed and the purchase amount doesnt clear the outstanding balance


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Here in the U.S. your description would be a 'short sale'… The bank or other lending institution just wants to get the property off the books and will take a reasonable offer for it's resale (after repossession) to move it. The loan is then written down and a tax deduction is take (for the corporate income taxes) for the loss.

The term used here for owing more on a property than it's worth is being 'under water'… appropriate considering the results ...
it effectiveley becomes unsecured, still owed of course.
The evicted former owner still owes the shortfall which the loan company may at least try to collect

So it's not 'secure'
then it clearly aint secured

the loan companies make it clear however that the remainder is not forgiven and they will chase the debtor for the rest of the loan ... later

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Sercured Loans

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