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Re: What happens after foreclosure and Move out ?
Posted by Alex Gonta on October 22, 2007 at 8:30 PM
In Reply to: Re: What happens after foreclosure and Move out ? posted by Jackie on August 29, 2007 at 0:10 AM
: : Hello. I had my house in CT foreclosed on in Sept 2001.
: : Can someone tell me what happens next? I have had no contact from the mortgage company regarding the house itself. They never announced the foreclosure in the paper or put up any signs, etc. I have driven by and there is someone doing some major repairs and renovations on the house now. The house wasnt in the best of shape, but the neighborhood was great. I feel like I am waiting for the bomb to drop. Is there a statue of limitations where they can come after us for any deficiency judgements after the house is sold ? Do they ever send us any paperwork as far as for the IRS ? We got a letter stating they were selling things left in the home and that any extra funds would be sent to us. Of course I dont expect anything from this, as it wasn't worth much. How about back taxes we owed to the city. Is there a time limit they can come after us for that ? I am now divorced. How long is this foreclosure going to haunt me on my credit ? Thanks for your help : hi okay my boyfriends dad just left my boyfriends family and
: moved to another state. Now they recived a phone call about
: two weeks ago saying they had to be out by that monday. So far
: no one has come and done anyhting. I just wanted to know if
: there was anything they could do or go since they really don't
: have any money. If anyone knows some type of information please
: let me know. I don't know what will happen to them and they are
: really nice people. Here's a link about foreclosure:
http://www.sashagonta.com/ForeclosureInfoPage It's an article I wrote. It gives you basic guidelines, but it's a legal
process, so I suggest you contact an attorney.
There's 3 phases: pre-foreclosure, and it depends if you are in a lien
theory state, or deed-of-trust state. In the former, it
can take 9 months to a 1year. In the latter, as a much as only 2 weeks.
The second step is at the court house steps. The bank in the first position,
will bid on the house it has a lien upon and take the house into
its inventory. It then becomes REO (Real Estate owned). It will
discharge any other liens, i.e: home equity loan people get nearly nothing,
and mechanics lien gets nothing. They will then pay property taxes for you,
so that their lien, of the first lender, will be secure, since the city
property taxes are the in the first position, the first mortgage is
in second position, home equity loan is 3rd position, and mechanics
lien is in 4th position. It's called the priority of liens. Since
the tax lien is first, the bank, that owns the first mortgage, pays
it first, so it instead becomes in the first position, instead of the city,
for unpaid property taxes. At this point, you still have what's called a "right of redemption"
period. It's usually 10 days. Check with your lawyer. You have
the right to buy the house back, from the bank, if you pay them
in full, penny-for-penny. If after that 10 days goes by, and
the bank was not offered payment in full by the original owner,your
right of redemption period has ended, and you can
no longer claim your property back. It goes up at auction, and this is phase III of the foreclosure process.
Then, investors start bidding for the property. Say your house
is worth $400k, and you owe $380k. The investor bids the full $400k.
If you show up at the court house steps, the bank pays itself the
$380k it is owed, and the positive difference, is given to you
IF YOU SHOW UP TO CLAIM IT. If you don't, it's given to state
as revenue. The bank is not allowed to make a profit on the sale of your
house. It's only allowed to get what it's owed. On the other hand,
let's say you owe $380k, and the highest bid that was made
by an investor was $360k, and the bank decides to accept this bid.
You are now SHORT $20k, and you owe it to them. If you fail to pay
them, they will issue you a 1099 to you, and this will be considered
income "earned" by you, and you owe taxes on it to the IRS. So if the highest bid is OVER the lien amount, the bank gives you this
money, IF YOU SHOW UP, but if it's SHORT of the amount the bank
is owed, you signed the promissory note when you got the mortgage,
so you, the original owner, owe the amount. So it's 3 steps:
a) Preforeclosure, i.e: a lis-pendis is filed. You have 9 months
to figure out a solution. Don't just move out right away, fight it. b) Foreclosure: Bank bids on its own property, and extuingishes any
other liens. The existing deed becomes a sherriff's deed.
Your right of redemption period starts and the clock is ticking.
This is your last chance. c) After-foreclosure. The auction at the court house steps. This determines
if you get some of your equity, or you owe the difference. Please
show up. It's usually at 8:00 AM, and a bunch of hungry investors
will bid on the property. try to renegotiate with your bank to lower your interest rate. Banks
would rather make loans than own property.
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