Foreclosure ???? Can you provide helpful advice? (bank owned, for sale, real estate)

[sgtg]

I live in Oregon. I refi'd my house approx 3 years with a 1st 225k and heloc 41k both with Homecomings. The refi was for a remodel project. The contractor was paid from these proceeds and did not fininsh the work and what he did was not proper. We filed complaints with the contractors board (CCB). I lost my job in the auto industry Feb of 07. Rate on heloc went to 12%. I could not find work with comp pay (rural area) and knew I would not be able to afford house. Could not sell due to remodel work and was told by CCB if we left and no longer owned house-contractor would suffer no consequnces (penalties) and would never have to repair home. Contacted homecomings and told them I could not make June payment. Was advised they could do nothing to help me until I was 30 -60 days late then call back. Called twice and was told I would be better off after 90 days. Called back and then was told they would raise my payment by approx 25% on the 1st for 1 year and they would do nothing on heloc to help. Listed house for sale. Real value due to area (saturated mkt, no buyers, many forclosures) and remodel may not even be 200k (70k upside down now). Recieved notice that lender had elected to sell property at auction on 3/24/08. Also recieved another work sheet for a possible work out-faxed back and offered to begin making FULL 1st payment starting 4/1/08. Called to follow up and was told unless I paid 3000 for legal costs and 19k to catch up-sale was not going to be stopped.

I believe this is a non-judicial foreclosure since I have recieved nothing from a court saying the sale has been ordered by a judge. What is the law in Oregon regarding this and deficiency judgements?Since Homecomings has elected to do this in this manner and they hold both the 1st and heloc will I owe them anything? it is also my understanding that if it is sold for a loss and reported to the IRS there is a 250k exemption for singles and 500k exemption to married filing jointly on this? Will there be state tax liability?

[ksucher]

[SIZE=3]When you signed your mortgage you gave them rights to foreclose for non-payment. Oregon has both judicial and non-judicial and all lender prefer non-judicial because it’s faster and cheaper.[/SIZE]

[SIZE=3]If the foreclosure processes does not recoup lenders fees and mortgage (either at auction or after bank owned and selling REO) there is a new law put in by Bush this year that the difference can not be taxed. The $250k and $500k limits you stated are capital gains profits from selling residence for income taxes.[/SIZE]

[SIZE=3]If you sell with a Realtor like myself as a short sale because of market conditions and condition of property. The lender then signs off on the short sale as full payment and there is no deficiency.[/SIZE]

[SIZE=3]Bankruptcy can postpone the foreclosure, but will not prevent it.[/SIZE]

[sgtg]

I've accepted the forclosure hit-just worried about Homecomings trying to come after me for the defiecency. I can accept the home loss and renting (already found new place) just want to avoid BK at all cost.

[Silverfall]

Originally Posted by ksucher

If you sell with a Realtor like myself as a short sale because of market conditions and condition of property. The lender then signs off on the short sale as full payment and there is no deficiency

Please no comments like this...I am a real estate agent also, but at some point we do need to stop plugging ourselves...

Now for the OP...

You need to look at your mortgage docs. Most mortgages are non-recourse loans meaning that the house is the ONLY source of collateral for the loan. With a recourse loan, yes the lender could still come after you for the deficiency.

The Bush program is only for the taxes on the difference, not the difference itself.

Most loans in Oregon are Trustee not judicial foreclosures. Again your mortgage docs would spell this out.

What an ugly situation..if you want to stay in the house, I would talk with the bank and show them a copy of your complaint against the remodeler. If they don't let you handle the situation and try and get it fixed as the homeowner, they will have to. I would use that as a negotiating tool. Try and use that to your advantage.

[sgtg]

Tired that. No luck-dont want to stay in home, was just trying to do right thing. Offered to have 3k to them by the 1st (retirement ck hits ) nope-money now or we sell on 24th. If it doesn't sell on 24th (local RE friends say people aren't even going to these sales now) we change locks on 25th and it becomes an REO,either way I have to be out. Then they said if it doesn't sell-they may let me short sell it. Huh? I thought once they do this it's theirs? Which reminds me-should I cancel the HO policy in my name?

[sgtg]

OOps - meant tried, but I am tired.

[marita]

Look into talking to an attorney right away,like now.Just call and ask to speak to one,if you can't, hang up and call the next one.

[Silverfall]

So the bank is going to foreclosure and then is offering to let you buy it back at a short sale amount? I've heard some stories, but that really takes the cake...

[sgtg]

Didn't quite get that myself. Why would I worry about trying to buy it back if I can't afford it or trying to save them money and find buyer after they tell me to leave and I take foreclosure ahit anyway?