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Foreclosure

We currently have a loan for $244K and a second home equity line for $79K. Our condo is worth $150K. I can’t do a loan modification I tried.

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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.

What happens if you decide to purchase a foreclosure and then do a short sale.

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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.

Purchased four homes. Two of the homes are in FL, and the other two are in SC. We may be forced to foreclose. How is a foreclosure going to affect our homes in SC?

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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.

My husband bought a condo a few years back. If we dont get a renter soon we will have to foreclose on the condo or short sale it.

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Question: My husband bought a condo (Interest only loan) a few years back before we got married. It is now worth less then half of its value, therefor we couldnt sell it, and was too small for us to live in it together. We ended up buying a second house together and was planning on renting out our condo. With our bad luck we have not been able to find a renter, so we have been paying on 2 mortgages. It is getting to the point where we can not afford both, and if we don’t get a renter soon we will have to foreclose on the condo or short sale it. My questions are as followed:
1. Will it affect my credit even though I didn’t purchase the condo or sign a contract. Only my husband did?
2. Can the bank go after us if we foreclose or short-sale? Can they take our current home?
3. Will we owe taxes on it and if so is there ways of reducing those or getting around them?
4. My parents co-signed on the new house, can this effect their credit, or can the bank go after them?
5. Lastly my husband has an HOA fee on the condo as well, can they come after us if we stop paying that? Can they garnish our wages.
Thank you for all of you help!!

Answer: –

1. It will only affect the credit of the person who’s name is on the loan, not the title. So in this case, your husband will be the only one who’s credit is affected if the property goes into foreclosure or short sale.

2. The bank can come after you (deficiency judgment) if you foreclosure or short sale…however they typically don’t. More than likely they will just 1099 you for the difference and count it as income. They can’t take your current home unless you pledged it as collateral in order to get the condo which you didn’t since you bought this home after the condo.

3. As for the taxes, yes you will most likely be given a 1099 for the loss which counts as income to you on your taxes. Depending on the situation, you may be able to use IRS form 982 which will counter act the 1099. You will need to discuss this with your accountant. As for property taxes, those will be taken care of either by the bank if they take back the home when it goes through foreclosure or even a short sale.

4. Because these are 2 separate transactions and homes, and was not used as collateral, they cannot do anything to your parents.

5. Yes, they could file a judgment against you as well…but more than likely they won’t.

My home is currently on (short) sale. I may be ultimately forced to file bankruptcy & foreclose on the house.

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Question: My home is currently on (short) sale since I can no longer afford it. I may be ultimately forced to file bankruptcy & foreclose on the house. My husband is not on the mortgage but he is on the deed. Will he become liable for paying the property taxes if I foreclose or file bankruptcy?

Answer: -If you go through foreclosure, and your lender ends up with the property, they will most likely pay the property taxes on the home if any are owed in order to try and sell it. If the short sale is approved, those taxes will be paid up as well because it will be part of the deal and the new owners will start paying the taxes from there.

When a property is auctioned off by a lender and the lender receives more than what is owed on the note, what happens to those funds?

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Question: If your home foreclosed and you tried the short sale and it did not sell,then you give it back to the bank. when the bank sells it for more than you owed what happens to that part that is over the amount you owed?

Answer: – After the foreclosure auction, those funds go to pay off any junior lien holders. If there are no junior lien holders those funds “should” go to the homeowner because it’s legally theirs. It’s interesting that most homeowners have no idea that they are entitled to any excess funds from the sale of their home through foreclosure. There are literally millions of dollars that go unclaimed each year and the county does not take the initiative to notify the homeowner of those overages. There are lots of companies, specifically attorneys, who understand this process extremely well and assist homeowners in getting these monies back… for a certain fee of course. What you have to be careful about are those companies who prey on people who have no idea what’s going on and use that to their advantage.

So you basically have two options. Go get the money yourself, it’s yours, you’re entitled to it. Or pay someone to get your money for you that way you don’t have to worry about it and you can let a professional do it. Just make sure you know what amount you are entitled to, that way you know how much the company or individual is charging you for their expertise.