So, "Screwed", you don't want a repossessed house to ever be sold?(posted 8130 days ago)Let's assume this happens:-
1. The original repossesed borrower will pay more money as time goes on until the house is sold and funds applied to his/her debt.
2. The house will deteriorate generally through not being lived in.
3. The house may be subject to vandalism/theft.
4. A property or area may become "blighted" by too many repoeessions in the area.
5. The neighbourhood deteriorates as a result of the three factors above.
6. The mortgage company come under pressure to sell the house at a lower price.
7. When eventually sold, the price realised is substantially lower than the mortgage debt resulting in a shortfall which the original borrower is chased for.
There is no stigma attached to buying a repossessed house and indeed if you do so at a proper market price you are doing the original borrower a favour. As you have no association with the previous occupier, your credit rating does not drop into the ground.
I can understand the view of people who have been reposessed and who see another person buying "their" home, particularly if it is some time since they were evicted and they have seen the garden become overgrown and stones through windows etc, and then somebody gets a bargain - it must be a heart wrenching ordeal and I am very sorry for anyone who had had this. But such is life and the best thing a repossessed person can hope for is that the property is quickly sold whilst "still warm" and undamaged - that way, their mortgage debt could well be paid off in full and they can start life again.