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My mothers house went into foreclosure in 2018 with a balance of 181k, we tried to sell for 200k and then found out there was a HUD mortgage for 26k which would have meant money out of her pocket that at the time she didn't have so she let the property go.
The house was set to be auctioned off in march of 2019 but it got canceled due to covid and that was he last we heard of it, Chase decided they would not go after her for the remaining balance after the auction, I'm not sure about HUD.
So my moms lawyer told her it s done and it would sell at some point, turns out chase sold the mortgage to Carrington mortgage and the balance has gotten larger and her credit as went down even further because the foreclosure is not done. Balance is now 221k plus the HUD but I'm not sure of the status of that loan.
I was told today by the mortgage company we can sell the house if we want, short sale or try do deed in lieu of mortgage. He said her "pretty sure" they will honor what chase had said about not coming after her for the difference after auction.
The dept they sent me to was trying to help us keep the house not sell it.
Right now the zillow estimate is 321k, the relator who had the listing when we tried to sell it in 2018 said as she remembers it, is 250-300k even with the work it needed.
The "preservation team" hired by the mortgage company has done some damage to the property and I've been told a few different ways of going about this, Let it go to auction and hope they don't come after her, sue her lawyer or not informing her of all the changes and what was happening since all the paperwork went to him ( i called him today and he said he has no knowledge of any of it yet clerks documents say he was served)
Sue the mortgage company for the damages and try fix up and sell the house or try a short sale.
Any advice is much appreciated. We are concerned that the house we now own together which is owned free and clear is at risk if any company comes after us as we do not have any money to pay them and dont wish to pay them anything.
You listed a zip code in NY. If your mother's home is in NY, NY is a recourse state, meaning that a lender can seek a deficiency judgment if the sale proceeds don't pay off the loan.
It's foolish and dangerous to rely on anybody "telling" you that they won't seek a deficiency judgment.
Suing anybody will cost you tens of thousands, take years, and the house will still be at risk.
The way real estate prices have been going, a short sale is probably a bad idea.
My advice for the two cents that it's worth is to put the house up for sale, as is, for enough to cover the loan balances, closing costs, and the realtor commission. You can negotiate the commission or you can sell FSBO on Craigslist and realtor websites and see who comes along with an offer.
Stop listening to lenders and lawyers. All they care about is money. They are not your friends.
Get out now when there is a chance to break even. Run the ads now, today, this morning. There are people looking for houses this weekend, at this very moment.
If you can clear the debt with a sale, put it on the market, and sell it. Clear the debt and be done with it.
Put it on the market for what it would take to clear the debt and see if you get any takers. If you fall short do a short sale which generally has terms negotiated for the release of any remaining debt.
If you have a way to get it done and remove that stress from your life, get it on the market and remove the stress asap. Why let the uncertainty over a deficiency judgement hang over you?
I was up all night thinking about it, I wanna get rid of it as quick as i can. Due to the damage the mortgage companies team did its worth less.
in the condition its in I think id be looking at 225-250 sale price 221k mortgage and 26k hud loan. I can't believe in less then 2 years the mortgage amount went from 181 to 221. They have added almost 1500 a month without informing her that it was even happening.
The original papers from chase and the courts say they will not come after her but now its under a different company so I'm calling the lawyer monday for them to get whatever I can from them. Thanks for the replies
I can't believe in less then 2 years the mortgage amount went from 181 to 221. They have added almost 1500 a month without informing her that it was even happening.
The have no obligation to inform her. The borrower is supposed to know what interest does to a mortgage balance when the payments stop getting made.
What is the interest rate on the loan?
You can use this calculator to see how the 181,000 balance grew over 2 years at whatever the interest rate is:
If it doesn't come up to 221,000 then it's time to ask the lender some questions.
The interest was little over 4% if I remember correctly. What I mean by them not telling her is we thought this was done. I have the paperwork that says the house is to be sold within 90 days of being signed by the judge and that the mortgage company will not come after her once its done. After learning the sale was cancelled thats the last the lawyer said to her and that was in 2019.
Mortgage company said its not interest they said every month the mortgage wasn't paid it was added to the balance.
Just trying to figure out what to do here since they damaged the house on top of everything else, id try sell but it needs more work then it did before and with the 40k added i think she would be in the same boat she was in before.
My mothers lawyer that handled the foreclosure got back to us today. In his email he states the foreclosure was done and finished and signed by a different judge thats listed on all the court paperwork. Doesn't make sense.
how would COVID have prevented an auction in March 2019, when it didn't exist at the time?
A lot of this is not making sense, not just the email from the foreclosure attorney. I would talk to a new attorney to get this all sorted out because I would have a hard time putting a lot of faith in this first one.
how would COVID have prevented an auction in March 2019, when it didn't exist at the time?
A lot of this is not making sense, not just the email from the foreclosure attorney. I would talk to a new attorney to get this all sorted out because I would have a hard time putting a lot of faith in this first one.
Ya know after just finding out about the house not selling I didn't even notice that. Its been a rough 2 days trying to figure out what's next, so now my question is why didn't the house sell why did they cancel the auction after the court paperwork stated sell it within 90 days.
Spoke to the realtor that helped my mom buy that place back in 06 and she said a short sale is the way to go and she knows someone who only handles those and is very good.
Ya know after just finding out about the house not selling I didn't even notice that. Its been a rough 2 days trying to figure out what's next, so now my question is why didn't the house sell why did they cancel the auction after the court paperwork stated sell it within 90 days.
Spoke to the realtor that helped my mom buy that place back in 06 and she said a short sale is the way to go and she knows someone who only handles those and is very good.
It is possible that they canceled the auction because they realized that there was a HUD lien on there as well. HUD has requirements that lenders try and work with homeowners to stay in their homes which is maybe why they were trying to get her to come up with a repayment plan and not sell it.
Auctions for properties get canceled all the time.
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