Answers - Foreclosure

Darrell asks,
“I have a 1st & 2nd mortgage. The 2nd is with a different mortgage company and it has a balloon payment which is due December 2009. What happens if I can’t pay the full mortgage balloon payment amount by Dec. 09 on the second mortgage. They can’t make me sale the house when I [...]

Foreclosure Question:

“I have been trying for months to get a loan modification from my servicing company. But to no avail. So I thought if I spoke directly to the lender, I’d get a better response. But the servicer tells my they don’t know or can’t give me that information.
So, is [...]

Reader Question:
I am a resident of Indiana. My mortgage is 15 months late. When I talked to First Franklin a month ago they said that the sheriff’s sale was set for April 15th. I’m partially in this mess because I went through a foreclosure relief agency and they said not to make [...]

I got this question from a reader…
“Am I understanding that when an owner loses his house in foreclosure and the auction takes place, he can actually purchase his own home back at a cheaper cost? In other words, can he bid on his own home?”
Let’s discuss the last question first, “Can the owner bid [...]

Here’s the question…then the answer.
“We, the buyers, signed a purchase agreement with a Realtor/seller two days before the seller’s bank bought home at a foreclosure auction. Are we still bound to the original purchase price agreement we signed with the Realtor/seller? We are still interested in the property, can we make another lower offer to [...]

Here’s the question…
“I have 2 mortgages right now. The first is a fixed 30 year loan for $442,500 @ 6.5% ($2754/Mo.) with Countrywide, and the second which is killing me is $132,500.00 @12% ($1466/Mo.) with HSBC – figures are pretty close I believe.
I know Countrywide as of today is helping people with mortgages that [...]

Here’s the whole question:
“We have a HELOC that we have been paying on time no lates. However, our 1st mortgage may go into default. What happens? If the 1st does go into foreclosure are we still responsible for the HELOC? “
What Happens To HELOC During Foreclosure?
Since the HELOC (Home Equity Line of Credit) [...]

I’ll reprint the question before answering..
“What happens to an IRS and State income tax liens and the real estate tax lien when the first mortgage company forecloses”
Superior Liens & Foreclosure
When it comes to understanding how liens are satisfied or expired at foreclosure, you must understand liens are ranked by time (ie. when they occurred…which came [...]

This is a great question.
A deed in lieu of foreclosure agreement is when the lender agrees not to pursue a foreclosure action against the borrower in exchange for the borrower signing the deed over to the bank. Hence the name, “deed-in-lieu”.
Deed in Lieu of Foreclosure Pitfalls
The obvious benefit for the lender is a speedier [...]

Sure. Help yourself!
Non citizens buy US real estate all the time, including foreclosure homes. Private parties buy usually as second or vacation homes. Florida has a big constituency of non-citizen home owners.
There are even non-citizen mortgage programs. These mortgage programs are called “foreign national” loans. They require a hefty down payment and a ton [...]

This is a tough question…
“After 20 years of marriage, my husband and I bought our first home in 2005. Do to a personal situation my husband moved out of the home in May 2007. We have not been to court but he gives me $1500 a month towards the mortgage. When I first applied for [...]

Here’s the reader question…then I’ll answer.
“My loan is being serviced by EMC. Please advise me what to do to lock in my interest for an extended time and cost involved.”
Mortgage servicing companies including yours are the first contact to attempt to negotiate a loan modification to your existing mortgage.
Loan modifications are not easy to negotiate [...]

Here’s the question, then I’ll answer.
“We are in foreclosure and the lender will eventually get our house. We fell behind on the mortgage and didn’t make much of effort to save it since our mortgage balance was greater than the house was worth. My question is, will we be taxed on the difference?”
Tax [...]

Here’s the whole question:
“My primary house was cash-out refinanced to pull out the equity to buy another house free and clear. Later I pull the equity out of the 2nd house and bought a 3rd house. Now it’s so hard for me to pay 2nd and 3rd house due to hardship and bad renters and [...]

In most states, the foreclosing lender (usually the first mortgage holder) has an obligation to declare how he will “collect” on his defaulted mortgage. This selection by the lender will determine how far reaching their powers of confiscation go when it comes to getting all of their money back.
Two Types of Foreclosure
The Public Trustee [...]

Here’s the whole question…
“I am afraid if we let this home of ours slip into foreclosure, we’ll never be able to qualify for another mortgage to buy another house. How long would we have to wait to for the foreclosure on our record to no longer be a problem?”
Home Buying After Foreclosure
Home foreclosure used [...]

I’ll republish the entire question now:
“We just refinanced. The lender has made a horrible mistake. When they gave us the new loan, they must have done something with the old loan and I just learned that a trustee for our Mortgage Company filed on 5/12/2008. on the loan that we just paid off. This is [...]

Here’s the entire question:
“If the lender takes a deed in lieu of foreclosure on a piece of property, does the lender have to pay any additional taxes other than whatever proceeds were received during the borrowers payment history. i.e. My borrower has made interest payments for 1 year, now they want out. I realize I [...]

Nope…not really.
To my surprise, after reading a number of agent and buyer emails, lenders are showing limited interest in accepting “short sale” offers.
Lenders Hate Short Sales
To explain quickly, a short sale, is asking a foreclosing lender to accept an offer and “payoff” his mortgage with a sale at a price that is “short” of [...]