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Old 11-11-2010, 12:40 PM
 
Location: Florida
17 posts, read 31,695 times
Reputation: 11

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After lurking on this site for the last day or so.. I finally joined.. mostly due to the fact that everyone seems to have alot of knowledge on short sales, deficiency judgments and the like

This question I guess is out there for all to see, but will be directed specifically at the individual that is listed as modicfication specialist. (like ur advice so far)

We.. (my sister and I ) inheirted a house in Feb 2009 in Florida.. the loan is of course still in my Moms name.. unfortunatly due to the real estate market we are currently in.. the home is slightly upside down.. due to my own diligent research.. I think it may bring in 165,000 MAYBE.. and that, of course may be pie in the sky.. there have been some recent sales in the area so I have researched comps.. but who knows how long they took to sell

My sister is currently going thru a fairly nasty divorce and is currently living in the property.. the house is now in forclosure.. My sister is trying to modify the mortgage.. I am not able to use my income to help her do this due to the fact that I am not living in the house. ( told this by a California modification specialist) so she is on her own... so to speak..

I, to be honest , do not understand this , because the house was left to both of us.. we just could not sell in this market..

but anyway... to cut to the chase... I am concerned that in order to modify this she will of course be placed on the deed.. and I think, will then become responsible for the note?
At least this is what I have been told..

she has the idea that she will live in it for awhile if it is approved..

maybe a few months ... rent it out .. and then maybe sell it down the road..

My concern for her is of course, if we have not seen the bottom of the property value drop. It could go further underwater... I have advised her that I think that she should walk away.. due to the fact that right now it is not effecting either of us financially.. She doesnt think that it is far enough underwater to worry about this..

We have a party that may be interested in a short sale.. but have not run it by the bank yet (BofA)

My question would be... after giving you probably more info than you need ... lol In the event that this short sale is approved.. Who does the bank go after in the event of a deficiency judgment.... My sister, me, or my Moms estate?? By the way there is a second on the home, thru a different lender..

Any info appreciated..
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Old 11-11-2010, 01:51 PM
 
Location: Salem, OR
14,931 posts, read 36,657,506 times
Reputation: 15342
The bank would go after the estate. Children aren't responsible for their parents debt.

If your sister can't afford the house on her own, the loan modification process is a waste of time. Honestly, I think you should talk with a short sale agent and get it sold.
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Old 11-11-2010, 02:12 PM
 
Location: Albuquerque
5,548 posts, read 15,029,321 times
Reputation: 2738
Quote:
Originally Posted by ALD1963
... inheirted a house in Feb 2009 in Florida..
the loan is of course still in my Moms name.. ...
the home is slightly upside down..
It sounds like you didn't inherit anything.

You can't inherit a debt. If your mom owed a credit card with a
balance, the credit card company can sue the estate, but not you.

Your sister may be squatting in the worthless house, but neither of you are responsible for anything.

There is no reason to do a short-sale, just give the keys to the bank. They won't
negotiate and will make your life miserable - even though you have the power here.

Quote:
Originally Posted by ALD1963
... Who does the bank go after in the event of a deficiency judgment ....
My sister, me, or my Moms estate??
Maybe your sister, who knows? If she is squatting there, some law might make her liable.

Is there anything else in the estate? If your mother left cash, securities, jewelry, the bank could go after that.

If not, you cannot be touched.

I actually know someone who went through this recently. They inheirited a heavily-mortgaged house.
After negotiating a 2% commission from both realtors and selling the house as-is, they got just over
$100 out of the sale which took months to complete. They should have also handed the keys over
to the bank. Just the cleaning cost more than the cash they got.

It was a single old woman who felt like she was somehow "obligated" to take care of the bank.

Last edited by mortimer; 11-11-2010 at 02:27 PM..
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Old 11-11-2010, 04:50 PM
 
Location: Florida
17 posts, read 31,695 times
Reputation: 11
will not modify the mortgage.. as she will not qualify.. and even if I helped her... I dont want to take on a underwater behind in payments home..... we found out this today per the modification specialist... that we would have to assume the debt... and then "Maybe" be approved..

we did keep the property up from feb 2009 till feb 2010.. which is when the payments fell behind...

I was told that the banks can not proceed with the forclosure untill probate is finished

My mom has only one liquid asset in her estate.. a land locked lot that is maybe worth about 4000 grand.... she deeded all of her other raw land to us before she died, as these were paid for.. (hence the reason for the need to probate)

we would have no problem keeping up the mortagage as the original loan is 139,000.... its the second that is putting in underwater

Unfortunatly my mom figured values would not drop when she did this..
someone recently tossed it at us that we should negotiate with the bank to assume the original debt... I guess this would be simalar to a short sale ... except the second would have to disapear.....

My understanding is than in a short sale the second has to give permission... (HELOC) but if the bank forcloses this property.. then the second is not paid anyway..

the bank stands a good chance of making their money on this one.. as long as the second writes off .....

But the bank is in a very messy positon.. due to more of a delay in probate....

Not sure why they would not negotiate with us .. since we technically , as of yet , do not own the property... but you bet we would have sold it a long time ago if that second was not making it near impossible... and then we would not have this issue...
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Old 11-12-2010, 08:58 AM
 
Location: Albuquerque
5,548 posts, read 15,029,321 times
Reputation: 2738
Quote:
Originally Posted by ALD1963
... we would have no problem keeping up the mortagage as the
original loan is 139,000.... its the second that is putting in underwater ...
the bank stands a good chance of making their money on this one
as long as the second writes off .....
Unless this is an absolutely fabulous property that you really really
want, it is not worth keeping. There is no reason to start making
payments and assuming liability on a house that is under water.

Would you take over payments on a car worth $5,000
that has an outstanding loan of $10,000 on it?

You have no obligation moral or otherwise to take over that house
and it's liabilities. It may have been your mother's house, but from an
obligation standpoint, it's as if a stranger down the street died with
an underwater house - and you moved in and started living there.

It's time to go. Now.
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