What happens after they foreclosure on me, do they take the house and go after me for the amount I owe?
2007-06-15 06:16:02 · 8 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I bought a brick mansion from an owner that simply gave the keys to the bank to avoid foreclosure (deed in lieu of foreclosure). This option is listed below since you don't have equity to pay a Realtor nor sell the home yourself, unless the buyer is willing to pay the owed difference at closing (short sale). I have found buyers that will if the home is otherwise aggressively priced.
In any case, unless you can come up with enough money to pay back the delinquent amount, or if FHA, have HUD help you workout a payment plan, the house will be sold.
2007-06-15 06:33:53 · answer #1 · answered by Ginger 6 · 0⤊ 0⤋
Uhm . . . Tony - that's exactly what a foreclosure is. The bank is trying to recover the money they lent you. If when they sell your house they don't cover the debt, then they come after you with a personal judgment and take something else you have now or in the future until the debt is satisfied. Best case scenario is that if they foreclose when you have some equity in the home, when they sell it there will be money left over. If that happens they subtract the debt plus all their legal fees and costs in bringing the foreclosure and if anything is left they will return it to you. I'm sorry this happened Man. Good luck.
2007-06-15 06:20:59 · answer #2 · answered by Anonymous · 0⤊ 0⤋
After the foreclosure, they can get a judgement on you for the remaining balance after they sell the house. A foreclosure will be a major hit to your credit, so try additional options
Work with the bank
- See if you can work out a payment "catch up" plan
- Give them the deed in lieu of foreclosure
- Ask them to take a short sale if you can list and sell the house
- Contact your local real estate investor association. Ask them who specializes in short sales. Call that person and ask them to help you.
Negotiate so the bank does not get a deficiency judgement and pursue you for the remaining balance. Then the bank will issue you a 1099 at the end of the year.
Use IRS form 982 if you have negative networth to avoid the tax on the forgiven debt.
2007-06-15 06:27:31 · answer #3 · answered by PersonalFreedom 4 · 1⤊ 1⤋
They just take the house and you have bad credit from there. Some companies might try to screw you over for some money, some might just take the house. It just depends who you financed it from. Did you just let it go, or were you not able to afford it? They will definitely put it in your credit report as a foreclosure and it will affect you when you try to finance anything from there. I am a consultant at a credit restoration company and if you have any questions or concerns, you can email me. sthommas@yahoo.com I am from Texas and I do not know what state you are from, but it also depends on the laws from different states.
2007-06-15 06:34:03 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Yes. In fact they can come after you for late fees penalties, etc. That was a bad loan for the banks to come up with and it's going to put a lot of people out of a home in the next couple years. The best thing I could suggest is HIRE A REALTOR (it's free unless you sell) ...get advice from a professional, if you need help finding a GOOD one then let me know and I can refer you to someone. Don't just pick any realtor! There are several ways I have gotten people out of similar situation but every situation has different circumstances.
2007-06-15 06:22:08 · answer #5 · answered by Patrick M 2 · 0⤊ 0⤋
Yes, they can and probably WILL seek a legal judgment for the deficient amount. You may also be surprised to find that the judgment includes the lender's costs for processing the foreclosure action (attorney fees and the like), as well as the actual amount of deficiency. This is why it's best to try to work with your lender ahead of foreclosure to try to reach an amicable settlement of the entire transaction prior to the full foreclosure action.
2007-06-15 08:45:55 · answer #6 · answered by acermill 7 · 0⤊ 2⤋
depends on whether you are a trust deed state or not, the type of foreclosure and what options your lender utilizes. In California, the answer would be "no", they might just 1099 you for their loss.
Regards
2007-06-15 06:23:57 · answer #7 · answered by Anonymous · 2⤊ 0⤋
The simple answer is yes. To minimize your exposure here, sell the home and settle the debt. If the lienholder forecloses, there will be additional costs (legal, sales) that you will be expected to pay. If you have zero or less than zero equity, you need to negotiate a solution with the lienholder ASAP!
2007-06-15 06:27:14 · answer #8 · answered by exitbrian.com 2 · 0⤊ 2⤋