Foreclosure Questions
07-21-2006, 07:02 AM
#1
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Foreclosure Questions
My sister needs to move out of her house. She has recently split with her husband and cannot afford the morgage. Since the market has softened in New England she actually lost the little bit of equity she had in the house. (She only put 5% down) She said she owes about $205K and a few realtors have told her that she would be lucky to get $180K for it.
She is thinking of telling the bank "take it it's yours".
What are the consequences of that? If she does that will the bank chase her for the difference between what was owed and what they got when they auction the house? Can she claim that difference if she claims bankruptcy? Any insight would help. Thanks.
She is thinking of telling the bank "take it it's yours".
What are the consequences of that? If she does that will the bank chase her for the difference between what was owed and what they got when they auction the house? Can she claim that difference if she claims bankruptcy? Any insight would help. Thanks.
07-21-2006, 07:10 AM
#2
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Have her talk to a lawyer and have the lawyer talk to her mortgage company. What was the situation with the husband? Does she own the home outright?
Bottom line, she can't just walk away from house without legal ramifications. I really don't want to say more than that. She needs to talk to someone knowledgeable in foreclosure processing to see what her options are.
Bottom line, she can't just walk away from house without legal ramifications. I really don't want to say more than that. She needs to talk to someone knowledgeable in foreclosure processing to see what her options are.
07-21-2006, 07:24 AM
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me thinks her credit is going to take a shit.
was the house and mortgage only in her name? Because if not, then the ex should also be responsible for half of whatever's owed unless there was some other agreement made during the divorce.
I'm confused...even if she ONLY put down 5%, and the market value is around $180k, and she STILL owes $205k (assuming you are talking principle amount), that is a $25k difference BEYOND payments she has already made (considering she has been there for several years already???), then either the market where she is REALLY took a dump or she really overpaid to get into the house.
any chance to refinance (extend the loan or change rates) for lower payments?
was the house and mortgage only in her name? Because if not, then the ex should also be responsible for half of whatever's owed unless there was some other agreement made during the divorce.
I'm confused...even if she ONLY put down 5%, and the market value is around $180k, and she STILL owes $205k (assuming you are talking principle amount), that is a $25k difference BEYOND payments she has already made (considering she has been there for several years already???), then either the market where she is REALLY took a dump or she really overpaid to get into the house.
any chance to refinance (extend the loan or change rates) for lower payments?
07-21-2006, 07:36 AM
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Try everything possible to avoid foreclosure!!! Foreclosure is the worse thing she can do. Attempt to sell the home, find a realtor that believes the property could fetch more, do not go to the bank and tell them to take it, that would be the worse possible thing to do.
She will need an attorney and get the ex involved in this as well.
She will need an attorney and get the ex involved in this as well.
07-21-2006, 07:50 AM
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Originally Posted by ProvidenceLeaf
She is thinking of telling the bank "take it it's yours".
sorry in advance, but that has to be the stupidest thing I've heard in a looooooooooong time. I act as a referee on behalf of banks occasionally in foreclosures, she does not want this to happen. Hiding from the bank won't do her any good, tell her to contact them immed. and see if they can re-fi at a lower interest rate or come to another solution. foreclosure means all the equity she has is gone--forever.
07-21-2006, 08:07 AM
#6
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No way she should tell the bank to just take it. She will screw herself if she does. Refinance, borrow the cash to keep paying, or sell and borrow the difference to pay what she owes.
07-21-2006, 08:35 AM
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Originally Posted by ProvidenceLeaf
My sister needs to move out of her house. She has recently split with her husband and cannot afford the morgage. Since the market has softened in New England she actually lost the little bit of equity she had in the house. (She only put 5% down) She said she owes about $205K and a few realtors have told her that she would be lucky to get $180K for it.
She is thinking of telling the bank "take it it's yours".
What are the consequences of that? If she does that will the bank chase her for the difference between what was owed and what they got when they auction the house? Can she claim that difference if she claims bankruptcy? Any insight would help. Thanks.
She is thinking of telling the bank "take it it's yours".
What are the consequences of that? If she does that will the bank chase her for the difference between what was owed and what they got when they auction the house? Can she claim that difference if she claims bankruptcy? Any insight would help. Thanks.
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07-21-2006, 09:11 AM
#9
Not Asian
Wow, how do you owe than the the house is worth? Is her home made by Ford? First, she should call the bank and just see what they can do. The worst thing you can do is ignore the bank. Filing bankruptcy may be another option.
07-21-2006, 10:46 AM
#10
The sizzle in the Steak
Do NOT foreclose! Contact a lawyer and have him contact the bank.
07-21-2006, 10:49 AM
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Originally Posted by phipark
Wow, how do you owe than the the house is worth? Is her home made by Ford? First, she should call the bank and just see what they can do. The worst thing you can do is ignore the bank. Filing bankruptcy may be another option.
i think it's best to work it out with the bank...they don't want you to foreclose and you wouldn't want to foreclose either, so there's a lot of opportunity for win-win solutions.
07-21-2006, 10:55 AM
#12
Team Owner
Why is the husband not on the hook for this?
07-21-2006, 11:11 AM
#13
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Thanks for your opinions everyone. I told her to go the lawyer route before so when I show her this post I hope she takes the advice.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
07-21-2006, 12:33 PM
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Originally Posted by ProvidenceLeaf
Thanks for your opinions everyone. I told her to go the lawyer route before so when I show her this post I hope she takes the advice.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
07-21-2006, 12:37 PM
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Originally Posted by ProvidenceLeaf
Thanks for your opinions everyone. I told her to go the lawyer route before so when I show her this post I hope she takes the advice.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
Here is the rest of the story because some of you had some questions. Her ex is not on the house or the morgage because he had questionable credit. He is a scumbag and told her it was her problem when she told him she was divorcing him.
She bought the house about a year and a half ago at the peak of the housing boom around here for about $220K. (it'a a small condo) Yes, the market has taken a huge plunge around here.
There were homes that were going for $400K that are now in the low $300's now. The market in parts of Massachusetts is going way down.
So she is about $25K in the hole.
07-21-2006, 02:27 PM
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Originally Posted by Water-S
also was there a prenup. if not she should get half of his stuff and if he had a 401k half the current value of that. if she had a good lawyer she have got half the value of pretty much everything. so i think she could take the value of half of his stuff and apply it toward the missing 25 grand.
And no, she cannot get half of the value of 401k (granted he had one), she would only be able to get half the value of the amount that accrued from the time they were married.
And in some states, it also matters how long they've been together also and how much each person made.
07-22-2006, 01:58 AM
#17
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I agree with all the people that said don't give it to the bank. I also suggest do not sell it if at all possible. How about getting either a roommate, a part-time job or both? There will be no solution that is painless and she has to live somewhere anyway. The only other thing I can think of is renting it out for as much as possible and making up the difference for the note. It will certainly be tuff for at least a little while. Over time, values will rise and hopefully, so will her financial situation.
With all due respect BigPimp, finding a real estate agent to take an overpriced listing would be no problem at all. They take the listing knowing the house wil not sell but hope that they can get the seller to reduce the price over time. Mainly this waste precious time, lets the listing get stale and places the owner in greater trouble.
With all due respect BigPimp, finding a real estate agent to take an overpriced listing would be no problem at all. They take the listing knowing the house wil not sell but hope that they can get the seller to reduce the price over time. Mainly this waste precious time, lets the listing get stale and places the owner in greater trouble.
07-22-2006, 10:38 PM
#18
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Originally Posted by Always Dirty
Where's the house? I'm in the market for something around that price range... 
07-22-2006, 10:42 PM
#19
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Originally Posted by BigPimp
Try everything possible to avoid foreclosure!!! Foreclosure is the worse thing she can do. Attempt to sell the home, find a realtor that believes the property could fetch more, do not go to the bank and tell them to take it, that would be the worse possible thing to do.
She will need an attorney and get the ex involved in this as well.
She will need an attorney and get the ex involved in this as well.
I had to deal with this when trying to close out my fathers estate. Forclosure isn't something you want to deal with. Avoid it at all costs. That stuff will kill her credit wise if it's on her credit report.
07-24-2006, 12:15 PM
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Originally Posted by Chief F1 Fan
sorry in advance, but that has to be the stupidest thing I've heard in a looooooooooong time. I act as a referee on behalf of banks occasionally in foreclosures, she does not want this to happen. Hiding from the bank won't do her any good, tell her to contact them immed. and see if they can re-fi at a lower interest rate or come to another solution. foreclosure means all the equity she has is gone--forever.
With all due respect Chief, what equity are you talking about? The house is worth less than what she owes. There is no equity....
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