> How many people, during the credit crunch, had their house defaulted on even in spite of never missing a single payment? The house just decided the physical property was more valuable than the debt, and kicked them out.
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Are you saying people paid their debt, but the bank was still able to take property the borrower owned? Can that actually happen?
Generally, no, it can't. Mortgages are contracts. By their typical contract terms, the lender can't foreclose unless the borrower is in breach of the contract. That means falling behind on payments. Could you write a custom mortgage to allow the lender to foreclose anyway? Sure, but then the problem is whether it would be securitizable or in compliance with local law. Unlikely, thus, a bank would not do that. The average mortgage and note are form contracts with some variation, but not this 'steal your house' term.
Parent post also implies that during the foreclosure crisis the value of houses increased. The opposite occurred.
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Are you saying people paid their debt, but the bank was still able to take property the borrower owned? Can that actually happen?
Any sources where I can read more about this?