Posts Tagged ‘Foreclosure’

Question: How long after foreclosure do I have until I have to be out of my house?

Answer: -Well it depends on your states laws as to how much time you have until you have to vacate your home.  If you live in a trust deed state where the redemption period is before the auction, then you’ll have a few weeks to a month to leave your home.  If you live in a state where foreclosure is filed judicially, typically the redemption period is after the auction so again depending on your states laws and redemption period after foreclosure, it could be a few months up to six months.

The best way to find out how long after foreclosure until you have to be out of your home is to call up a title company and ask them or you can visit your State Laws page and see when you redemption period is.

Question: I had an investment property go into foreclosure 9/1/09 in Arizona, Maricopa county. The home has a first mortgage for 160k and purchase money HELOC for 20K. Neither loan was ever touched after the purchase. On Aug 17, 2009 Countrywide sent me a letter informing me the HELOC will have a new servicer Real Time Resolutions, INC.
On 9/5/09, I received what seems to be an attempt to collect from Real Time Resolutions, INC. it states I have, “30 days to dispute the validity of this debt or any portion thereof, this office will assume this debt is valid.” The payoff they are requesting is $ 21,193.74 which I am assuming is the HELOC plus fees.

Is this allowed or legal, can a new servicer attempt to collect on the Heloc since the home has already gone into foreclosure? Should I meet with a lawyer or am I okay ignoring these letters?

Please advise and thanks for your time,

Aaliyah, Gilroy CA

Answer: -This is normal protical and yes since your loan was “sold” to a new servicer, they can try to collect the debt.  So they will send you certified letters in the mail every month telling you how much you owe and that it’s an attemt to collect the debt.  You don’t need to respond unless you are disputing the action and I’m sure they will try to call you every week and threaten you to pay…or else.  By sending these letters, it gives them the right to proceed with foreclosure if they want.  However, we all know they won’t unless there is substancial equity in the property.  More than likely they will just write it off as a loss and 1099 you for the difference.

Question: I am in California. I missed my first payment Sept 1. I got a letter telling me to bring things current by Dec 16th. What happens now? I am not sure when the period of redemption begins? Was I already in it? Or does it begin Dec 16 and go three months? People tell me different things and I am a single mom of four kids and need to plan. Thank-you. Nomi

Answer: -Nomi, the California redemption period is approximately 3 months and begins after you receive the notice of default.  Typically you won’t receive a notice of default until you are at least 3 months behind on your mortgage, especially now, banks are slower issuing the notices of default because they don’t need any more inventory.  So you’re about 6 to 8 months out from foreclosure, if it goes that far, so you do have several options as a homeowner.  Unfortunately Obama’s HAMP program hasn’t turned out the way we had all hoped, however there are alternatives.  Assuming you want to stay in your home, one option is a loan modification. This is something you can do yourself or you can hire an attorney to do it for you…just be careful in choosing the right attorney that really does care about your situation and will guarantee their work. Another option is to sell your home, if it has equity, and move into something smaller or less expensive until things pick up again. If your home does not have equity and a loan modification doesn’t work, you could try to do a short sale where a buyer offers the bank less than what is owed on the property. Whatever you do, don’t give up.

Question: As part of an estate I have a 2nd interest in a mortgage and the 1st mortgagee has now opted to foreclose. Will my interest be paid or do I only get paid if the property sells for more than the first mortgagee is owed?

Answer: -When the property goes to foreclosure, everyone is paid based on lien priority.  If you are in 2nd position and the 1st is foreclosing, the opening bid will be the loan amount on the 1st plus a bunch of fees.  The only way you’ll get paid is if someone bids more at the auction than the opening bid.  Anything above the opening bid will go to whoever is next in priority.

Question: Hello:

Please help. My father’s home recently foreclosed (last week) and our incompetent bankruptcy lawyer did not know it was important to file the bankruptcy prior to the foreclosure which would have cleared any tax consequences or deficiency judgment against him. Since my father has filed bankruptcy AFTER the foreclosure, I understand the lender will either forgive the debt and issue a 1099 to the IRS or seek a deficiency judgment. My question is, if the lender decides to seek a deficiency judgment, will the deficiency amount be discharged in the bankruptcy – although he filed the bankruptcy after the foreclosure? Please advise. Thanks!

Answer: -More than likely you won’t even have to worry about the deficiency judgment because most lenders don’t file a deficiency judgment against homeowners.  It is much more common for them to issue a 1099.  But yes, if by chance they did file a judgment against him, filing bankruptcy after foreclosure shouldn’t matter.  In fact, most homeowners will file bankruptcy after they are hit with the deficiency judgment so it will be wiped out.

Question: I have a mortgage and home equity line of credit on the same property with Countrywide. I am in Florida. If my property is foreclosed upon what happens to the home equity line of credit? Also am I held liable for taxes up to the foreclosed date?
Thanks

Answer: -If your home has a first and second with the same lender, Countrywide, it’s almost treated like it’s one loan.  If they send it through foreclosure, they’ll probably start at just what’s owed on the first and hopefully get someone to bid on it…If no one bids then they’ll end up with the property.  Then they’ll probably write off that 2nd in which they could file for a deficiency judgment but more than likely they will 1099 you for that amount they lost and you’ll have to pay taxes on it.  As for the property taxes, they’ll have to pay those in order to sell it to an end buyer.

Question: I have an investment property in California that foreclosed, now I have a differdent company NARS calling me regarding that line of credit that I owed the to Chase. They want me to pay the whole 53,000 in full or make payments on it. I currently live in NC. Can they lien my home in NC or garnish my wages?
Thanks,

Answer: -If they file a deficiency judgment against you, yes you’ll have to pay them and that judgment may be able to attach to other properties or yes they could garnish wages if they took it that far.  Very rarely does this ever happen because it costs the banks even more money to sue for a deficiency judgment and clearly they should know you don’t have any money, so they don’t even bother.  And if by some odd reason the bank did file for a deficiency judgment, most homeowner file for bankruptcy which wipes out the judgment altogether.  More than likely they will 1099 you for the amount they lost and write the loan off.

It’s not uncommon either for lenders before foreclosure and after foreclosure to put fear into homeowners minds telling them they will sue them or garnish wages or take assets if they don’t pay.  These are all scare tactics.  It’s there job to “scare” you so you’ll pay them as much as you can, even though clearly you can’t afford any payments to them.

Question: We currently have a loan for $244K and a second home equity line for $79K. Our condo is worth $150K and we owe $320K, but we don’t know wether in California we are liable for that 2nd loan since it’s a home equity line? I don’t want to end up owing Bank of America $79K when I’m going to loose my property and ruin my credit. What should I do? I’m still current with payments but I’m struggling and I can’t do a loan modification I tried.

Answer: –  I would keep trying to work with your bank on the loan modification.  There are several attorney’s out there that “GUARANTEE” there work when modifying loans so you may want to check into that as well.  It’s hard to believe sometimes, but they really do want you to stay, the challenge has always been jumping through all their hoops which an attorney can assist you with.  Also you have a better chance since they know certain things to say that will increase your chances of a successful loan modification.

If a loan modification still doesn’t work, then you could try to do a short sale.  Unfortunately with a short sale you would have to sell your home, but if you can’t make the mortgage, then you’re going to move anyway so might as well be a short sale then foreclosure on your credit.  Regardless if you do a short sale or foreclosure, the bank still has the right to come after you for the deficient amount, but very rarely does this ever happen in California because of the laws there.  And if you have an seasoned agent or investor working with you on the short sale, they can actually eliminate the possibility of a deficiency judgment altogether.  So really all you have to be concerned with is a 1099 from the bank.  They will write off the loan as a loss and 1099 you for the amount they lost.  Whatever you do, don’t ever give up.

Question: What happens if you decide to purchase a foreclosure and then once done do a short sale on your 1st home? Can you the bank come after your 2nd home?

Answer: -No.  The only time they can come after your other properties is if you used them as collateral to get the loan for the other homes.  Typically this happens more often in commercial transactions.  Most banks won’t lend you the money if the property itself isn’t sufficient collateral for the loan.  Your biggest concern would be a deficiency judgment.

Question: My husband and I invested our life savings and purchased four homes. Two of the homes are in FL, and the other two are in SC. We live in one of the FL homes, and we may be forced to foreclose on the the second home in FL. How is a foreclosure going to affect our homes in SC? Is the bank going to put a lien on the home we live in or the other two in SC? Please I need help.

Answer: – More than likely nothing will happen to your homes in South Carolina if your home in Florida goes through foreclosure, unless you used your South Carolina homes as collateral to purchase your Florida home. Your biggest concern would be a deficiency judgment which would definitely affect you and possibly other real estate that you own.  But again, more than likely they will 1099 you for the amount they lost and write it off.  But there is always that chance, which is why it’s always better to try to do a short sale instead of just giving up and letting it go to foreclosure.  At least with a short sale and a good agent or investor who knows what they are doing can help you avoid a possible deficiency judgment altogether.