>>>>As I said, I don't know the mortgage system over there but here the banks don't own the property - the mortgagors do.
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>>>Same here, until you default and then they take it. Then they own it and can sell it. Or maybe not - haven't got even close to that while I had a mortgage. Maybe the house is put up for sale and the bank only gets the money, but then I don't know who the owner is. Maybe the poor guy still 'owns' the house but can only watch it being sold and has no more say in the matter? Now that would clear this muddy issue.
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>>Let me see now. They've given this guy a chunk of money - it's gone from their coffers. He can no longer pay them back over the term. So they have the right to sell the property and take their loan back out of the proceedings. Maybe it didn't go for the desired price so they thought they'd buy it, accept an absorbable loss for the time being, then they can sell it later when the market's more buoyant. As I said, I didn't see the news article.
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>>I was trying to point out one misconception that it wasn't theirs to buy off themselves. It wasn't repossessed, but possessed is a more apposite expression.
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>It is. In short, the bank couldn't get the money, so it took the house. The purpose of the auction was to sell the house, or at least establish a price.
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>As for the money having left their coffers, not really sure they are losing here. If you've studied the way the payment is calculated, it dents into the capital very little in the beginning; it takes about a quarter of the loan term until half of the payment is interest - before that it's almost all interest.

Depends on the repayment method. There are "interest only" loans whereby the mortgagor pays just interest on the capiltal till the end of the term, then some form of savings (eg an endowment life assurance policy) pays back the capital.