Foreclosure University
Your Online Real Estate Investing Resource
Question: My son is paying on his house that was foreclosed a couple/few years ago: why does this happen after someone has bought that house?
Answer: – Well it’s probably because he agreed to pay a certain amount over time to satisfy the debt. It’s was either that or they probably told him they would file a judgment against him. That’s my guess.
Question: MY PRIMARY HOME AND RESIDENCE IS IN CALIFORNIA BUT I OWN A APARTMENT COMPLEX IN ARIZONA. IF I LET IT GO TO FORECLOSURE, CAN THEY TRY TO TAKE MY HOME IN CALIFORNIA?
Answer: – No, unless you pledged it as collateral in order to qualify for your apartment complex.
by Jarad 5 Comments
Question: A bank that is foreclosing on a home holds a first and a second mortgage. The first alone is more than the home is worth. What will the bank typically bid at the sheriff’s sale? Would it bid market price minus second mortgage lien, because the buyer would still have to be paid off?
Answer: – Typically the opening bid is the amount you owe plus foreclosure fees, back payments, etc. If someone bids at the foreclosure auction, then the highest bidder gets the property. If no one bids, the bank takes back the property and sells it through a real estate broker. If the bank does not get paid the full amount they are owed, they can 1099 you for the difference and count the loss as income to you so you have to pay taxes on it.
by Jarad 6 Comments
Question: I am confused if I will lose my house in Chapter 7 Bankruptcy as I am not understanding the Equity Exemption rule. My house is worth $230,000. I owe $105,000 on the first & $60,000 on a HELOC. I am unemployed and my unsecured debt is $60,000. If I file bankruptcy can the mortgage holders force me into foreclosure if I am up do date with payments? I am getting conflicting advice from attorneys.
Answer: -Unfortunately we are not bankruptcy attorneys so maybe someone else can shed some light on this topic. I do know that a Chapter 7 is a wipe out and therefore you would liquidate all your assets to pay off all your creditors. An attorney is hired to help “protect” those assets, like personal belongings. The trustee or attorney who represents the court and the creditors will look at all the assets (house, car, furniture, equipment) anything of value and decide what must be liquidated to pay some of the debt that was wiped out. So depending on whether or not your home has any value, it would be in your best interest to find a good attorney or maybe even investigate different Chapters of bankruptcy’s to make sure Chapter 7 is the way to go.
Question: If I declare bankruptcy now with regard to my other debts, will it prevent the short sale from going through?
Answer: -Yes, for only a short period of time. Eventually it will foreclose. Bankruptcy only postpones an auction or short sale which buys you more time. In fact, many short sale investors will use bankruptcy as an option if they need to buy more time so it doesn’t go to auction, as long as it’s in the best interest of the homeowner.
Jarad here and there is some BIG NEWS today.
FHA announced that they have suspended their 90 day rule beginning 2/1/10. This is beyond huge for investors because we can now sell properties to FHA buyers without having to season the title for 90 days.
There is a HUGE inventory of FHA buyers, in fact most first time home buyers use FHA because of the simpler lending requirements and lower down payments. And since a lot of deals we are seeing are entry level homes it makes for a perfect fit.
See it was difficult there for a little while because FHA refused to finance a deal if the seller was not on title for at least 90 days or longer which prevented a ton of first time home buyers from getting into these entry level homes at affordable prices.
Now finally after 4 years they decided to lift that requirement, with a few minor exceptions like…
All transactions must be arms-length, with no identity of interest between the buyer and seller…
And the seller has to be on title at the time of close… etc. you can read about the waiver on HUD’s website.
This means anything is fair game now, Short Sales, REO’s, you name it!
So go out and start flipping those deals, you have no excuse now.