Housing Bubble 2: Return of the Ugly

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A community for discussing and documenting the second great housing bubble.

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SeattleRain@lemmy.world

Ontario home sold at massive $800k loss a worrying window into current market (www.blogto.com)

submitted 4 months ago by SeattleRain@lemmy.world to c/housing_bubble_2@lemmy.world

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[–] Dogyote 8 points 4 months ago

The home was reportedly listed as a power of sale, which differs from a regular home sale. The clause is usually written into a mortgage note that authorizes the mortgagee to sell their property in the event of default to repay the mortgage debt.

As a result, the lender forces a sale on the public market and gets all the funds owed to them, while the current owner gets to keep any excess profit. In a foreclosure scenario, the lender usually takes ownership and gets to keep all the profits from the sale.

I bet the former owners initially made an $800,000 down payment. The timeline of price drops was rapid, just over a matter of months, so I'd guess the low selling point was probably pushed through by the bank trying to recover the money they lent as quickly as possible.