Foreclosure University
Your Online Real Estate Investing Resource
Question: Just got summons in Arizona for a piece of property that was foreclosed on and sold. The bank is suing us for the deficiency amount. Is there any way to fight this? We think we may have a defense because there was no public report for this property at time of sale.
Answer: – Yes, the bank does have the right to go after the homeowner for the deficient amount after the home has been through foreclosure.
Question: I have property in WA, currently it is a rental property since I am in the military and am in NC presently. Being that I cannot come close to renting the house for what I pay in mortgage, I am facing letting the house go. Trying to find out all the ramifications of foreclosure.
Answer: – Well, the bank will either 1099 you for the difference if they are not able to collect what is owed, or they will file a deficiency judgment against you for the amount they lost. Ideally, you are hoping for a 1099-c because in most cases you can counteract the 1099-c if it’s your primary residence or you are insolvent.
by Jarad 3 Comments
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 your redemption period is.
Usually you’ll receive a notice from the bank or the individual who purchased the home at auction. There is a small chance that if an investor picked it up, they may allow you to stay there and rent. I say small chance because they are going to question whether or not you have the means to pay them rent when you weren’t able to pay the bank mortgage. You will have to convince them that you are in a good enough situation where you can pay them a monthly rent or they will evict you.
Either way, you’ll know when you need to be out because you’ll see notices on your door or delivered in person. Until that point, you will want to make arrangements with finding another place to live because chances are high the property will go back to the bank and they will ask you to leave. So don’t sit around and wait for it to happen, I’d start looking now for another place and be ready.
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.
by Jarad 5 Comments
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.