My friend has a home that she is paying on a mortgage. She has got 4 months behind on her mortgage and the bank is proceeding with foreclosure. She is low income and was already struggling with her mortgage payments before the foreclosure. Is there anything that she needs to do or will the bank come after her for any fees? I don't think she will be able to afford to make anymore payments and she has kids.
2007-11-16 09:18:53 · 6 answers · asked by shybutnaughty 1 in Business & Finance ➔ Renting & Real Estate
The bank will probably not come after her for any deficiency judgment, if the home doesn't sell at sheriff sale for enough to pay off the loan in full. Banks hardly ever sue their former clients after foreclosure.
They know that your friend can't afford the payments because of current financial conditions, so going after people like that will not get the bank any more money. In fact, it will cost them more to sue after foreclosure, and they might not be able to collect anything, ever. So that's nothing to worry about.
She might want to try selling at a short sale, if nothing else. Or give the property back to the bank with a deed in lieu of foreclosure. Both would help avoid foreclosure.
2007-11-19 03:32:22 · answer #1 · answered by Anonymous · 0⤊ 0⤋
On the sixth month, the bank will repo the house and auction it.
Stay the 2 extra months, save the money and find a cheap rental.
Any fees owed to the bank will be paid at the new sale. If it sells for less that what is owed, the bank will take the loss but your friend will have to pay the taxes on the difference as earned income.
If the home sells for more, your friend will still be entitles to the equity left over.
2007-11-16 09:40:14 · answer #2 · answered by thebigcheese1993 2 · 0⤊ 0⤋
I am not sure what state you are in, but tell your friend to put her Land in a Land Patent... Although she will still be obligated to pay for the mortgage at some point she won't go into foreclosure and she won't get kicked out of her house.
She will have to do this before the Notice of Sale. If the Sale has taken place she can not save her home. If you are in California I can help you with more information. Good Luck!
2007-11-18 13:55:33 · answer #3 · answered by carla_corde 1 · 0⤊ 0⤋
I help people in foreclosure for a living. Depending on the state she lives in and/or the type of foreclosure (judicial or trustee) the consequences will vary. Basically in a judiciary foreclosure, they will get a judgment against her that she will need to repay. In a trustee foreclosure, she will get 1099ed for the amount owed and it will show as income that she will need to pay taxes on.
This is very basic general information. Her specific details need to be known before one can provide you with information.
As someone mentioned, she might want to look into selling the home, regardless if she has equity or not. e-mail me if I can be of any assistance.
Regards
2007-11-16 10:11:18 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The bank will foreclose the property and sell it at auction to the highest bidder (which may be the bank itself if bids do not go sufficiently high). The bank will then consider that she owes the bank any amount over and above what the property brought at sale, plus attorney and foreclosure expenses.
2007-11-16 10:37:08 · answer #5 · answered by acermill 7 · 0⤊ 0⤋
I would try to sell the house and ask the mortgage company if they will accept a "Short sell" which is basically the bank accepting less than the full balance owed on the mortgage.
2007-11-16 09:24:57 · answer #6 · answered by kta kta 2 · 0⤊ 0⤋