Foreclosure University

Your Online Real Estate Investing Resource

Jarad

my home is in foreclosure…what is the notification I will recieve?

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Question:  my home is in foreclosure…what is the notification I will recieve to know that i have to move?

Answer:  – First you will receive a notice of default from the bank letting you know they are enforcing their rights in the contract to obtain the property in the event you don’t pay. Depending on your state and if it’s a judicial or non-judicial foreclosure process, you’ll either have your redemption period before or after the auction. If the redemption period is before the auction, then once the home forecloses you will receive a notice to vacate the premises. This is when you need to be out. If the redemption period is after the auction, then again you will be notified to vacate after the redemption period is over. The notice is usually posted on your door.

outstanding water bills prior to OUR purchase from the bank

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Question:  In Illinois,if there are outstanding water bills prior to OUR purchase from the bank, do they get wiped out when the property is sold on the courthouse steps?

Answer:  – Yes, when the bank forecloses on a home and they get it back as an REO, in order for them to sell the property with a listing agent, the home usually has a clear title. If it doesn’t, you’ll be able to see what is clouding title when you go to closing. That’s also why you get title insurance. The title company is protecting you against any unpaid real estate taxes or liens.

Short Sale on Second Mortgage

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Question:  We are moving and our home will have to be a short sale. We have perfect credit and have never been late on a payment. The short sale will need to be on the second mortgage only. We owe $150,000 on the second and the short sale will probably be $75,000 of that. We are purchasing a lot where we are moving to and I want to make sure they will not be able to put a lien on it for the difference. In other words what assets will they come after for the difference.

Answer:  – Well, technically they can come after you for whatever is not satisfied. If the short sale is approved and successful, the individual doing the short sale will need to make sure it “satisfies” the loan in which you will receive a 1099-c. If they don’t satisfy the loan, then the bank retains the right to come after you for the deficient amount.

There is actually another option, similar to a short sale, but takes half the time, allows you to stay in the home or (be able to actually sell it in this case) for a profit. We basically get rid of the $150,000 second mortgage by offering a settlement with the lender. The loan is completely satisfied and it never shows up on your credit like a short sale does. Just another option out there for you to think about.

Cash for Keys after foreclosure

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Question:  Our home has been foreclosed and the redemption period is over… We are being evicted… There is a “cash for keys” offer on the table… What can we take – “legally” – from the premises and still meet the “cash for keys” expectation… and what repercussions would there be if we elect to not accept the offer and leave the house after eviction… without any legal trouble…

Answer:  – You can legally take everything that is yours which means anything that is NOT attached to the property itself. This would include furnishings, some appliances, personal belongings etc. You should leave the light fixtures, appliances that are attached or built in like the dishwasher, microwave, stove, the furnace, a/c unit, etc. You get the idea. The goal here is that they want you to leave peacefully. They are tired of ticking off tenants or homeowners who wreck the home as they leave. In the long run, it’s better to pay cash to help them leave. Now, you don’t have to leave if you don’t want to either. The bank or realtor may want you to believe you have no other option. But legally you do and you don’t have to accept their “cash for keys” offer. You have to weigh all the options. Is it benefiting your family to leave now or would it be better to leave a few months down the road to give you time to settle into another home. Timing is important. It’s not fun to leave right before a holiday or when school is almost out. It costs to move as well. Don’t settle on any amount less than $1000 or 1% of your homes value. Remember, if you leave now, you have to start making payments somewhere else. If the eviction process takes 90 days, that’s 3 months of rent you don’t have to pay for. By no means do I encourage you to stay, but run the numbers and make sure it’s beneficial for your family. The only repercussions if you don’t take the offer would be that you don’t get any cash to move out and you will be evicted eventually.

And more more thing. If you decide to go with the “cash for keys” option, make sure it’s all in writing 🙂

Line of credit in first position. What happens after a foreclosure by the second lender (in California)?

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Question:  This question is about a line of credit in first position and what happens after a foreclosure by the second lender(in California). The loans are in an unusual order. I provided a second loan for an owner of a rental house (meaning I am a lender, somewhat like a bank). The owner/borrower already had a Wells Fargo line of credit secured by that rental house. Since the homeowner (now the previous owner) failed to make payments to me I caused the foreclosure and am the present owner. I want to ask “What happens with regard to the line of credit?”. The LOC is for $75,000 which is slightly more than the current value of the house. For that reason I think Wells Fargo will not want to foreclose on me. Will Wells Fargo in fact pursue me at all rather than the original borrower? If so, will they want instant repayment? If I can’t repay immediately how will Wells Fargo determine the rate of interest and repayment schedule?