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What happens to an investment property foreclosure that’s under your personal name?

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Question: What happens to an investment property foreclosure that’s under your personal name? Can they go after your personal assets, home, etc? Under Illinois law.

Answer: -As with all states, it depends on what’s in the agreement with you and the bank. Just look at the closing docs and it should specify what happens. For most lenders, the property is sufficient collateral for the loan or they wouldn’t be loaning you the money in the first place, so they don’t come after you for anything else. However, since I don’t invest in Illinois nor am I familiar with all their laws, you may want to get a 2nd opinion with a local attorney.

If the total LTV between the 1st and 2nd liens add up to 100% or less, is there any way to add the 2nd to the first?

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Question: If the total LTV between the 1st and 2nd liens add up to 100% or less, if the 1st lien is up to date and the 2nd lien is past due for more than 2 months, is there any way to add the 2nd to the first, even if they are with two different lien holders?

Answer: -NO. You’ll have to refinance. If the property is at 100% LTV already and the lending industry being what it is now plus having a few lates on your credit, chances are it will be very challenging to refinance this property into 1 loan.

Can the 2nd lien holder start foreclosure process?

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Question: If the primary residence has two mortgages and the first one is up to date, but the second is not, can the 2nd lien holder start forclosure process?

Answer: -Yes, any lien holder can initiate the foreclosure process to get paid what’s owed them. However, many junior lien holders wait longer before they initiate foreclosure because they are responsible to payoff any senior lien holders. So at the auction if no one bids, the 2nd has to payoff the 1st. This is why if you are bidding at the auction, it’s critical to know who is foreclosing because sometimes they start the bid a what’s owed the 2nd and you think you’re getting a steal. Come to find out you have to pay off the 1st as well.

Deficiency judgement on a Trustee Sale?

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Question: In the state of Idaho can a lender obtain a deficiency judgement on a Trustee Sale or must they use a Judicial Foreclosure?

Answer: -Yes, lenders can file a deficiency judgment no matter if it was foreclosed judicially or non-judicially. Typically it’s more common to see deficiency judgments on properties foreclosed judicially but I live in a state where trust deeds are the primary security instrument and deficiency judgments are filed sometimes. In most cases they 1099 the homeowner.

Who is responsible for the difference of the original loan amount if a short sale is accepted?

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Question: Who is responsible for the difference of the original loan amount if the property is redeemed by the mortgagor, or if the property is sold in a short sale? Who is responsible for the difference? The money lost on the original loan?

Answer: -The individual(s) who signed on the dotted lines and promised to pay the loan back are responsible for the difference. The lender has the option of doing nothing and counts it as a loss, or they can 1099 the homeowner for the difference, or they can file a deficiency judgment against you for the whole amount. If they file a deficiency judgment against you, the only way to get rid of it is to file bankruptcy or pay it off. If they 1099 you for the difference and count it as income, you can fill out a form (982) the IRS has that (in most cases) will counter the 1099. So really all you have to worry about is the deficiency judgment. And a good short sale expert knows how to avoid that so it’s rarely an issue. Most of the time they just 1099 you for the difference.

when buying a short sale home how long does it take to close?

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Question: when buying a short sale home how long does it take to close?

Answer: – If you are the end buyer, the time it takes to close varies depending on how ready you are. It can take 3 days to 60 days depending on where you get financing and what they require. The transaction is the same as any other residential home. Typically with short sales, you’re just getting a better deal. You should be able to close within 30 days which is usually what the banks require once the short sale as been approved.