help!!! foreclosure steps (Palm Beach: mortgage, credit, loan)

[heydade]

If you are in Dade, Broward or Palm Beach Counties.....stop paying completely and enjoy living in your home mortgage free for about a year or even more from some accounts. The courts are OVERLOADED, the banks are OVERLOADED. Some banks are even delaying the initial foreclosure filings because they really don't want to be stuck with your home and it looks better on their documents...to their shareholders. I have heard about some people finally being evicted 15 months after they stopped paying.

You have three options with the 3rd being the most likely. # 1.....short sale. They rarely work because the bank accepts all offers..sits on it for about 3 months....then and only then notifies the highest offer that they "won" Well guess what ? most people that are looking for a home, don't have 3 months to sit around and wait. This is why short sales rarely work. Not only that, but more often that not, banks do not want to write down such a large loss. YES...it would behoove them to do so, since they are creating a much bigger loss when foreclosure takes place...but they are dumb like that and that is one of the reasons we are in such a mess with the mortgage markets.

#2...deed in lieu of foreclosure. Generally only works when what you owe on the house is 20-30k less than what the appraised value is. Meaning that if you owe 240K and the house is only worth 180K.....you can forget about a deed in lieu of foreclosure. Lenders are willing to take a hit, but not a HUGE hit...they might as well foreclose then.

# 3....foreclosure. Life goes on......with an FHA loan, you can buy a house 3 years after filing for a foreclosure (although they say they are going to change that to 5 years). Your credit WILL Get better...life WILL go on.

Good luck to you and don't worry too much. Just hang onto the keys and stay in your home for as long a you can. They will notify you a couple of days or weeks before you are to get evicted. At that time, I would send the lender your keys.

As for the pool, they have these liquid chemicals that you can add to your swimming pool or any body of water, that kills mosquito larva and keeps them from laying eggs. Check your local home depot or Lowe's for it.

[Strel]

Originally Posted by ipanema121

I can't pay the mortgage...

Our option now is foreclosure.

The only thing that I need to know is how to abandon the house legally.

That is a very bad idea. However desperate you are, that house is YOUR investment and YOUR equity. Abandoning it only hurts YOU and will destroy your credit for decades to come.

Many people make the mistake of not dealing directly with the bank - they ignore the notices and stick their heads in the sand, or they just give up. Don't be an ostrich!

Your best bet is to negotiate with the bank - to establish a course of dealing at the very least, perhaps get a forbearance. Remember that the bank only wants to get paid - they do not want to own the property - and they would more often rather get something from you than pay their attorneys to got through the whole foreclosure process.

Whatever you do - STAY INVOLVED AND TALKING TO THE BANK. Giving up and walking away only hurts you.

And why would you want to do that?

[momix5]

My cousin did a short sale, it really worked well for her, she did have to wait the two years anyway to purchase another home, but only because she would have been killed in interest, the bank worked with her becuase in the end rather than go the whole foreclosure route, they did get 85% of the mortgage, and they knew she could never afford to pay the mortgage after her husband was let go from a 20 year work place. It was really hard for them, but now her life is back on track, try to work a short sale wiith the lender, and remember keep the homeowners up!

[Retiredcoach]

Originally Posted by Wendyb0077

TO THE OP,
You cannot owner finance when there is an existing Mtg on the home. You could rent it, but will need to get caught up on the Mtg. (Need $$ for that)
It is not a good Idea to drain a pool in a vacant home. First of all you now have a large dangerous hole for someone to fall into and second the pool can lift from not having water in it and do major damage to the structure.

Alway seek legal counsel before doing anything!!! Hope everything works out for you...

Wendy,

From your previous posts, you seem to have a great deal of knowledge of short sales and foreclosures. Hypothetically, if a bank forecloses on a property that I own and sells the property for less than is owed, can they come back on me somewhere in the future? Do banks "write off" these losses and forget about any extra monies owed?

[Lilybeans]

Originally Posted by Retiredcoach

Wendy,

From your previous posts, you seem to have a great deal of knowledge of short sales and foreclosures. Hypothetically, if a bank forecloses on a property that I own and sells the property for less than is owed, can they come back on me somewhere in the future? Do banks "write off" these losses and forget about any extra monies owed?

Actually, when they foreclose they get a judgment for an amount of money, and then the home is ordered sold in order to pay that judgment. At the foreclosure sale bids are taken on the property. The bank can bid up to their judgment amount, but they don't have to.

For instance, they could have a judgment for $100,000, and bid $5000 and get the house. You would still owe $95000.

In reality, most banks don't do this, and there is talk of a law to prevent a deficiency judgment (that's what it is called)

[Bette]

Originally Posted by Retiredcoach

Wendy,

From your previous posts, you seem to have a great deal of knowledge of short sales and foreclosures. Hypothetically, if a bank forecloses on a property that I own and sells the property for less than is owed, can they come back on me somewhere in the future? Do banks "write off" these losses and forget about any extra monies owed?

If you bought your home between April 2005 and July 2007, you may be eligible for the debt cancellation (form 982 with the IRS). This must be a primary home. You will receive the notice of cancellation of debt from the lender. I think this is only good until the end of 2009. Your best bet is to try to do a short sale.

I have seen short sales work in many instances. Banks are responding faster lately - just got one done in The Acreage in Palm Beach County (they owed $460K - buyer got it for $290K). Beautiful home too. It took less than 30
days - the offer was presented April 23rd; it is closing May 30th.

[Luke9686]

Actually, you can do owner financing on it. It takes some creativity. You sell it "subject to the existing mortgage." This equats to the person taking over your mortgage. Kind of is and kind of isn't owner finance.

I wouldn't just walk away. It is hurting you and the community when you do that. There are options. I would call some of those "Save your house" postcards you have received in the mail. They all aren't bad, money hungry investors. I can refer one if you'd like. They'll negotiate a short sale from the bank.

If you do go the way of a short sale, beware any forgiven debt is subject to taxes. So if you owe $200K, and you negotiate a short sale of $100K, you will be taxed on $100K. You can have the lender waive this I have heard. Not sure though.

[Lilybeans]

Originally Posted by Luke9686

Actually, you can do owner financing on it. It takes some creativity. You sell it "subject to the existing mortgage." This equats to the person taking over your mortgage. Kind of is and kind of isn't owner finance.

The old wraparound. Remember those?

[Katie1]

Contact the lender see if they will do a FOREBARRENCE! Your credit will still show a forclousure BUT the morgage co will appreciate you letting them know & they can give you instructions on keys pool ect. When my son did this to his house they sent some one to get the keys & winterize the house. Good luck....

[heydade]

Originally Posted by Luke9686

Actually, you can do owner financing on it. It takes some creativity. You sell it "subject to the existing mortgage." This equats to the person taking over your mortgage. Kind of is and kind of isn't owner finance.

I wouldn't just walk away. It is hurting you and the community when you do that. There are options. I would call some of those "Save your house" postcards you have received in the mail. They all aren't bad, money hungry investors. I can refer one if you'd like. They'll negotiate a short sale from the bank.

If you do go the way of a short sale, beware any forgiven debt is subject to taxes. So if you owe $200K, and you negotiate a short sale of $100K, you will be taxed on $100K. You can have the lender waive this I have heard. Not sure though.

This is not true due to the Mortgage debt forgiveness act that passed in December of 2007. It will NOT be taxed...unless it's not the primary home.
The Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 364 eliminates tax on debt forgiveness recognized on short sales, foreclosures and deed in lieu of foreclosure arrangements.

On December 20th, President Bush signed into law H.R. 3648 otherwise known as the Mortgage Forgiveness Debt Relief Act. Prior to this if a homeowner were to sell their home for less than the amount of the mortgage and the difference were forgiven by the lender, the amount of the forgiven debt would be taxable. This new law will prohibit the Internal Revenue Service from striking with the foot when life has caused one to assume a prone position. Scenarios in which this law would apply would include any foreclosure, short sale or deed in lieu were any portion of debt is forgiven by the lender. Lenders do make a practice of forgiving such debt in cases in which the homeowner has little or no assets other then the mortgaged home. The new law applies only to debt forgiven on a principle residence.