Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Thank you for your post. We have a job offer and are thinking if we should take it and leave the house. What good has come out of owning a home for us. Nothing. I think that we made a horrible decision when we bought the place. It was our first place and we didn't understand what we were getting into. I think that if the bank was to take the house back and we didn't have to pay the difference we would be in a much better financial situation than we are now. I am waiting for the bank to call to see if they can work out a loan modification for us, but I don't think that they will be able to help to much.
So is this why people who get into foreclosure also declare bankruptcy? Which I do not want to do.
The problem is that you will not be able to rent any propery because you let a property to foreclosure or go into bankrupcy, it happen to me,7 years of bad credit, and that happen when the Dad Bush was president, it is happening all over againg lots of people loosing their properties beacuse the economy is bad. Just vote for another republican and we will go deeper in the hole.
Go ahead and laugh. What the hell is a jingle mailer? Are you thinking if we let the home go into foreclosure that they will garnish my wages until the debt is paid.
Lindz.. I have never heard of a bank going after a previous owner for the debt owed. I have seen people totally strip their properties, dropping the value by 1/2 of it as owners walk away, taking their marble counter tops, even doors and toilets. Banks dont have time to go find property owners to try to persue bad debts. Thats not to say they cant, but I have never heard of them doing it.
What others here are speaking of is called deficiency judgment. The reason why banks usually dont go after them is because of the steps involved in order to receive one, and the costs involved. Banks actually have to go back to court, after a forclosure, and after the resale, and hold an evidentiary hearing, to prove that the property value on sale date was less then then loan amount. The previous owner then gets called to court to prove that the property value was more then the loan balance and then show that the bank prematurely sold the property at a loss for no reason. There are to many steps for the banks to be involved with going through with getting a deficiency judgment, and banks are all about cutting costs, not about spending money to get judgments against people who cant afford to pay them.
As for them garnishing your wages in the off chance that they would take this extreme step, that varies state by state, if and only if they can come back after the balance, which I dont think they can. You would be advised to seek a lawyer who can negotiate the bank taking back the deed with an agreement they will not come after you for the balance. In todays market banks will easily negotiate the deed instead of forclosure to save themself costs.
Lindz.. I have never heard of a bank going after a previous owner for the debt owed. I have seen people totally strip their properties, dropping the value by 1/2 of it as owners walk away, taking their marble counter tops, even doors and toilets. Banks dont have time to go find property owners to try to persue bad debts. Thats not to say they cant, but I have never heard of them doing it.
What others here are speaking of is called deficiency judgment. The reason why banks usually dont go after them is because of the steps involved in order to receive one, and the costs involved. Banks actually have to go back to court, after a forclosure, and after the resale, and hold an evidentiary hearing, to prove that the property value on sale date was less then then loan amount. The previous owner then gets called to court to prove that the property value was more then the loan balance and then show that the bank prematurely sold the property at a loss for no reason. There are to many steps for the banks to be involved with going through with getting a deficiency judgment, and banks are all about cutting costs, not about spending money to get judgments against people who cant afford to pay them.
As for them garnishing your wages in the off chance that they would take this extreme step, that varies state by state, if and only if they can come back after the balance, which I dont think they can. You would be advised to seek a lawyer who can negotiate the bank taking back the deed with an agreement they will not come after you for the balance. In todays market banks will easily negotiate the deed instead of forclosure to save themself costs.
Pgh
I was going to add that the extreme step in going after a deficiency is very rare. In California, with its loaded dockets it is unheard of.
In many cases, the lenders do not even report the foreclosure to the reporting agencies. Nothing to be gained by being vindictive. Bad PR.
The other fella who posted before you must have been a special case. I would be upset too if no one on this entire planet would rent to me for 7 whole years. I would picket at the lender's offices holding a sign saying "I hate Bush, but I love this bank for ruining my credit". Heck, I would camp out on their doorstep for the entire seven years since I had no place else to live.
The deed in lieu option is a tough one since in this case there is a second presumably held by another party. What would be in it for them? On the flip side, if the senior lienholder got the deed in lieu, he would take subject to the junior lien and would have to foreclose afterwards anyway to extinguish that junior lien. But if the senior lien holder that has taken the deed doesn't, then there is no sale and the junior holder does not trigger 580(d)'s requirement of a sale and our friend here does not get the anti-deficiency protection. Tricky. Need some of that good strategery.
Other states that do not have the anti-deficiency laws allow a junior lienholder that much more leverage over the borrower.
Last edited by Bob The Builder; 01-13-2008 at 04:10 AM..
My husband and i live in south florida and are facing a similar situation but for different circumstances. the laws are different in most states. according to a lawyer here and our accountant - for us, if we cannot keep the house, would be a deed in lieu. the only draw back is paying on capital gains. we will not have any so that is one of our better options. a full out foreclosure is very bad - in florida it can stay on your credit for up to 10 years and public record indefinately. the bank can go after for the difference (judgement) and if you do not pay possibly have your wages garnished. the only way to not have wages garnished should they want to is to file bankruptcy or claim head of household. a short sale would not work for us do to some of our circumstances so i do not know much about that.
My husband and i live in south florida and are facing a similar situation but for different circumstances. the laws are different in most states. according to a lawyer here and our accountant - for us, if we cannot keep the house, would be a deed in lieu. the only draw back is paying on capital gains. we will not have any so that is one of our better options. a full out foreclosure is very bad - in florida it can stay on your credit for up to 10 years and public record indefinately. the bank can go after for the difference (judgement) and if you do not pay possibly have your wages garnished. the only way to not have wages garnished should they want to is to file bankruptcy or claim head of household. a short sale would not work for us do to some of our circumstances so i do not know much about that.
Imorg
Looks like the laws in Florida lenders a right to obtain a deficiency judgment. Also I noticed that there is no non judicial foreclosure. Looks like a lot of work for the bank to get this behind them.
A judicial foreclosure can take time and money for the bank. I was reading 180 days minimum.
I would think the bank does not want the house. I hope you can negotiate out of part or all of the deficiency.
Hope the best
Last edited by Bob The Builder; 01-13-2008 at 10:36 AM..
You wouldnt be able to buy again for a long time, your credit will be messed up for years. This is a bad decision.
I agree. This is where the real consequences kick when you walk away from a property. The lender may or may not try to make you pay but bad credit can haunt you for years to come ...
It's not just when you need to borrow again ... but every time you apply for a rental, want to buy insurance or even apply for a job ...
These days credit reports are used for many things besides just credit. More and more employers are checking credit to determine whether you'll be a reliable employee. Bad credit can keep you from getting a job.
You will have to explain this over and over again for at least 7-10 years (seven years for a foreclosure, 10 years for a bankruptcy).
All of this is computerized now. The credit agencies have direct access to the mortgage company databases.
As soon as you even have a late payment, it's automatically reported to the credit agencies.
Same with foreclosures. It shows up on the credit report very fast. Less than 30 days in many cases.
To think otherwise is foolish.
Sheri
Perhaps I stand corrected. When I was a young lawyer back in the 80's I was asked by my supervising attorney to call up a major institution to ask if they would report a foreclosure. They said no. I would not bet my life on it either way these days. I wouldn't even go so far as to call people foolish to think otherwise. Please try not to be so insulting. Insulting does not make your argument stronger. It just makes it insulting.
Last edited by Bob The Builder; 01-14-2008 at 06:39 AM..
Sorry, I wasn't trying to be insulting. I just think it's very unwise to assume that foreclosures aren't reported ...
Your entire payment history is on the reports these days. It's amazing how fast those reports are updated ... they even have your latest credit card balances and payments. Often in as little as 14 days.
Sorry, I wasn't trying to be insulting. I just think it's very unwise to assume that foreclosures aren't reported ...
Your entire payment history is on the reports these days. It's amazing how fast those reports are updated ... they even have your latest credit card balances and payments. Often in as little as 14 days.
Sheri
My point of responding to your post as I did is that sometimes people are herded into actions by insult.
For example:
It is foolish to waste money on rent. Or it is wishful thinking to hope that real estate prices will ever fall. There is always a hint of truth to any statement. Combine that with a "you are dumb if you disagree with me" makes for a dangerous situation.
The lenders and reporting institutions certainly will not be handing out awards for going into foreclosure. But someone reeds to scrutinize them too. There were certainly more than a few MBAs and PhDs that screwed up worse than the OP. How do we score them? Why do they get to skate?
Last edited by Bob The Builder; 01-14-2008 at 08:55 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
