What the auction does to your equity
What the auction does to your equity
People with some equity tell themselves they will get money back when the house is sold on the courthouse steps. The lender does not run that sale to cut you a check. Default interest, legal fees, trustee fees, and costs get paid first. What is left is often little. Sometimes nothing. Sometimes you still have a deficiency.
That is the abuse: you thought you had a cushion. The file ate it while you waited.
A clean sale is a purchase that pays the loan or gets a lender-approved short payoff and a release. You convey title. The mortgage liability ends as a closed deal, not as leftover wreckage from an auction. That is the out. Short sale vs the auction.