P.C. wrote:
The mortgage company doesn't actually give a loan for the purchase of the property (as in cold hard cash.....all paperwork.....yes, no?
Yes. Transaction is handled by escrow company. They verify title of the property is free of liens, etc. They collect money from the lender and buyer and pay the seller. They draw up the property deed and record it with the county
The mortgage company doesn't actually own the property that the purchaser is mortgaging....yes, no?
Yes. the lender is recorded in the deed. After the loan is paid off the lender draws up a conveyance to be recorded with the county. The homeowner is provided a copy of the county stamped conveyance after recorded. If the property is sold before the loan is paid off the escrow company will issue them a check to pay off the loan.
If the homeowner walks away, the mortgage company now owns the property...yes, no?
Yes. Thats what foreclosure is.........its all spelled out in the loan contract. They get to dispose off the property and whatever is left after they deducted the loan balance and expenses incurred is returned to you
Why is the property necessarily worth less than before? Could it not just as easily be worth more than before?
Property value is based on what price someone else is willing to pay to buy your property. When times were good there were buyers waiting in line to submit proposals. Properties were selling 20%-30% over the asking price in my area last year
Don't they receive money monthly that they can now get all over again for the same property?
Where is the loss to the mortgage company ?
Investors buy properties planning to sell after a year or two ..... gambling that values will go up 20-30%. They minimize putting out their own money. What better way to make $200K - $300K in 15-24 months on a $1 million property with someone else money!
I'm still confused. Clear as mud?
