I’m actually curious about a specific situation within that, when a LOT more is owed on a property than it’s worth. Let’s say there is a property that is reasonably worth $100k but there is over $200k owed on it to the bank via non-payment, interest, whatever. What does the bank do then? There, in theory, will NEVER be a buyer for that property at that price. What becomes of it then?
In: Economics
The bank sells at a loss and writes the loss off against other profits.They hope to sell a repossessed property for more than they are owed, but it doesn’t always happen.
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