FHA Mortgage Guide

The Los Angeles Times asks “who owns your home” and then comes up with this answer:

“Most people in the U.S. buy houses using mortgage loans from banks and other lending institutions. In theory, the firm that issues your mortgage owns your property until you pay off the loan. In practice, however, that’s not how the modern mortgage business works.”

Huh? Are you kidding?

Ever look at local property records? They say that the people who own house are, ta da, homeowners and investors — not lenders.

A mortgage or a deed of trust is a lien against a property, a claim against the owner which is secured by real estate. If the owner does not repay the lien according to required terms, then the lender can foreclose.

However, when a home is foreclosed the lender is still not the owner. A foreclosure is merely a forced sale. Either the property sells for an amount sufficient to repay the loan, or the lender makes a bid to acquire title. Only if the property does not sell at auction does the lender gain ownership — in effect, the lender buys the property for the unpaid value of the loan, a price no one else is willing to pay.

For the entire article from December 3rd, see Foreclosure-proof homes?

Check out these FHA resources for more information

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