legal ramifications of foreclosures?

Question

I have mortgages on two properties. I have a faulty business partner on one house and is not holding up his end of the deal. I thought about foreclosing on that house. Other then a bad credit score, what else might happen? Could I lose the house I'm residing in right now? I realize the money invested will be lost, but are there other financial or legal ramifications??

Answer 1

The best thing to do is get a lawyer and explain your situation to them. They can then advise you on the best way to handle the situation.

The best way I know to get a lawyer is through Pre-Paid legal Services.

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Answer 2

The question is a little confusing but I am guessing that both mortgages are with the same company. Besides the other ramifications that have been mentioned, if you allow the mortgage company to foreclose, you would be triggering the univeral default clause on all of your credit cards, etc. which means they could raise your rates through the roof! And believe me they will. I had a tenant somehow get his electricity in my name, then skipped on a $200 balance. Tampa Electric sent the bill to collections, the collection agency, despite having my correct address, sent the demand notices to a p.o. box that I didn't own and then filed the collection account on my credit report. Of the six credit cards that I possess, 5 of them bumped the apr to 31% without any notice to me. I just happened to pick up a statement and realized what happened. That's how I found out about the collection account.

You want to avoid foreclosure by any means. It sounds like you need to "evict" the partner, not foreclose on him. Depending on what kind of agreements you have in place, it sounds like it might be a lengthy battle. You are going to somehow have to manage the mortgage note until you can resolve the situation.

Answer 3

foreclosures are property specific, meaning a bank cannot foreclose on your home if you default on a rental home you own. they can issue a deficiency judgement against you (and anyone else on the mortgage) for any remaining balance owed after the home is sold, if a balance remains.

unless YOU hold the note for the property, and your faulty partner pays you, then YOU cannot foreclose on the property, the bank must do this.

also, if the second home has your name on the mortgage, YOU will suffer just as much as the other guy will. your credit scores will drop drastically, you will have to wait (most likely) several years before anyone will lend to you to buy another home, and judgements can result after foreclosure.

your best bet is to sell this other home ASAP, using a realtor.

also, keep the payments up, even if that means you must make ALL payments alone, regardless of your situation. keep reciepts of where you paid, so that if you need to go to court against your partner, you will have proof.

i recommend that you and your partner agree to sell the home ASAP. if he doesn't want to, buy him out of the home, if possible. OR refinance ASAP (make sure your mortgage is current), and when you refi, take your name off the loan and deed, and let this be HIS problem alone.

as always, you should consult w/a real estate attorney, as well as any other professionals you may need to discuss matters with.

Answer 4

Unless you are holding the note you can not foreclose on it. Often we are less picky about mixing our gene pool but get similar results because we did not look at the potential consequences.

You need legal advice, your partner is about to damage your credit thru their negligence. Run, do not walk! This is serious and will jeopardize your ability to borrow money for years to come. You are equally responsible regardless of what the other does you both will pay for bad credit.

Buy them out. Offer half of the equity and refinance the loan so they are out of the deal and you preserve your credit or just sell it and dissolve the partnership. Your friendship probably is over anyway at this point and you can only gain from here.

A lender can come after you for any deficiency in the foreclosure sale, but usually do not.

Answer 5

Save your credit!!! Dont go into foreclosure because the partner wont help you. That is 10 years to keep cursing his/her name. Just get out. Sell the house take what you can in equity and put the money into another investment property for yourself.

Answer 6

Hopefully, the two of you entered into a written contract to purchase this home together? Equally, I would hope that both of your names are on the mtg?
IF you own two homes you must have some basic contract knowledge and business sense, so going over the credit damage should be a moot point, along with a deficiency balance. Do not believe that you and or your partner will not be sued for a deficiency balance on real property. This can be a serious problem for the other home you own as a lien can be attached securing payment upon sale of the home for any remaining balance. As a note of further caution many lenders have clauses that will put your other home in default should any leins be attached. You may want to inquire with your lender on this to confirm or dispell this possiblity.
Have you tried to reason with this partner? Especially if his name is on the mortgage as well the same problems and responsiblities will fall on them as well. I know you will scream as this but you have to see the bigger picture.
Once you determine lein conditions on your mortgage on both places, if no default clause is present, make the payments and put a lien on your own home. You can do that you know. You would be in 2nd place, and only in the event of the lender forclosing, you would be in a pretty secure position upon sale to receive your money back. According to the law, you would also be entitled to interest on your lein, but it must be "reasonable". To ensure that it would not be a bone of contention in a court, make it the same as your lender. It should be on a standard amortizatin schedule of compound interest.
I know this may put you into financial straigts for awhile but in the near future, you could then take the partner to civil court, in addition to the lein, depending on your states laws and in some cases the court could require him to release the property back to you if you have enough financial out lay to warrant his default in dollars and cents. The breach of contract, assuming it's in writing will hold it's own water with your proof of payment, taxes, ins and the lein filed.
In order to foreclose you must be a holder of the deed/mtg, or a LEIN... But you have to realize that in order to foreclose you will foreclose on yourself and that is a whole different story.
Besides, foreclosure is the remedy, either Judical or strict in the event of default. Which brings me to ask, how is the title held? Joint tenents, tenents in common as this will make a big difference.

Answer 7

In Florida, you can't loose your house except in some rare cases. Other states Im not sure. Maybe you should try renting the house, or selling it outright?