Debt Glossary : Property Auctions
When a property is repossessed because of default on a mortgage or secured loan, it is often sold at a property auction to provide the proceeds to clear the debt.
Unfortunately for the victim of repossession, properties sold at auction often fail to realise their full market value, and in extreme cases may not even go for enough to clear the debt.
In these unfortunate cases, the debtor will lose their home and yet still have outstanding debts.
This kind of situation is only really encountered in cases of negative equity or where borrowing has exceeded the value of a property, such as in a 125% secured loan deal.
© 2008 Debt Sorter
