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My next door neighbor abandoned his home on January 1st this year. They left the home to foreclose. Last month the home went up for auction and I saw that it was sold for $20k to a mortgage company. The home is worth way more than that...and I think they still owed about $180k when they left it. My question is...after getting $20k, does their bank go after them for the remaining $160K they owe? Or do they just call it even? Also, does his home being sold for such a low amount affect my home's worth?
Location: The place where the road & the sky collide
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Quote:
Originally Posted by Samana
My next door neighbor abandoned his home on January 1st this year. They left the home to foreclose. Last month the home went up for auction and I saw that it was sold for $20k to a mortgage company. The home is worth way more than that...and I think they still owed about $180k when they left it. My question is...after getting $20k, does their bank go after them for the remaining $160K they owe? Or do they just call it even? Also, does his home being sold for such a low amount affect my home's worth?
I'm dealing with the exact same thing with a house on my street. From what I understand, it does effect the worth of the other houses in the neighborhood.
As far as home worth..since a mortgage company bought it, I am assuming that they will go ahead and re-sell...so I hope that re-selling bring up values again. Unless, of course, they sell it dirt cheap anyway.
NC is a non-judicial foreclosure state and they will go after you for a deficiency judgment. However, it can and would be trumped by a bankruptcy. So as long as the defaulter can prove they're insolvent, they can get clear of it.
I honestly can't believe that a home with a $180k deficiency was sold for $20k at auction... Are you certain of the records? Because they typically set some type of reserve at the auctions and if they don't get it will put the house up on MLS as a REO. Those numbers are shocking.
Does the former home owner get taxed on the $160k?....I sure hope so...
As of now, I think they actually do NOT... There's temporary legislation in place where the people who short sell don't have to pay tax on it and I would guess it applies to a foreclosure. I believe that legislation expires in 2011 or 2012?
I asked another neighbor of mine - who keeps in contact with the neighbor that moved - and he says that he didn't file for bankruptcy. He also owns another home in Virginia (where he moved back to). I wonder if they will put a lien on his current home in Va?
Quote:
Originally Posted by MikeyKid
I honestly can't believe that a home with a $180k deficiency was sold for $20k at auction... Are you certain of the records? Because they typically set some type of reserve at the auctions and if they don't get it will put the house up on MLS as a REO. Those numbers are shocking.
I believe so...I told my dad (who lives in NYC and is looking for a house down here) about the auctions and he attended one. The houses were going dirt cheap. The only disadvantage, from what my dad told me, is that there was a lawyer there from a bank, outbidding everyone who bid. I guess he's the same lawyer that bought my neighbors home.
Location: The place where the road & the sky collide
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Quote:
Originally Posted by Samana
Wow..that's what I thought. It's very sad.
As far as home worth..since a mortgage company bought it, I am assuming that they will go ahead and re-sell...so I hope that re-selling bring up values again. Unless, of course, they sell it dirt cheap anyway.
I'm dealing with the reselling dirt cheap scenario, here. They have it listed so cheap that people are afraid of it. It nixed 2 other home sales on the street earlier this year.
I got the information from my county's website. It says Sales Price: $20,000. Sales Date: Sept. 24, 2010. Total Market Value: $176,000. I think those numbers are crazy too.
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It nixed 2 other home sales on the street earlier this year.
