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While I too understand that there are fines & interest imposed on unpaid property taxes the fact is that foreclosures generally are overseen by a judge that will have seen LOTS of situations and for folks that appear unsophisticated / unaware of the law the judge cannot really provide any special relief. In contrast if the OP's parents get an experienced lawyer that has successfully laid out a legal basis for those fines being reduced / eliminated for situations that may involve retirees that are being preyed upon the effort could very well be worth it.
In a technical sense it is not uncommon for people to sell homes before a foreclosure but that is NOT THE BEST WAY TO APPROACH this because that creates a "race to the close" which no buyer or seller really needs to deal with AND it also will all but certainly transfer a HUGE portion of the equity to the firm that "bought" the delinquent taxes. I know how those sorts firms do business and BELIEVE ME THEY ARE NOT LOOKING OUT FOR DAD'S INTERESTS!!!
The OP really needs to ON THE PHONE RIGHT NOW trying to line up either a private attorney OR a senior advocacy / ombudsman to get mom & dad on the right path. NOW NOW NOW!!
I contacted a pro senior lawyer who offered "free" help to senior citizens. I explained the situation to her and that my parents do not have any savings built up, and that the only asset they really have is the home. She, herself, even stated that a reverse mortgage was the best option to prevent foreclosure of the home. At this point, what kind of lawyer do I need to find? Bankruptcy? Real estate? Consumer? And yes, I live in Ohio.
I contacted a pro senior lawyer who offered "free" help to senior citizens. I explained the situation to her and that my parents do not have any savings built up, and that the only asset they really have is the home. She, herself, even stated that a reverse mortgage was the best option to prevent foreclosure of the home. At this point, what kind of lawyer do I need to find? Bankruptcy? Real estate? Consumer? And yes, I live in Ohio.
Which only proves that some attorneys know squat--especially about real estate.
We're you able to determine the time frame that is available to your parents to avoid foreclosure? That should be the first thing to figure out.
If the free attorney can't figure out the foreclosure process (sometimes you get what you pay for), you should consult with an experienced real estate attorney.
At least your parents' house isn't in Michigan. It would be long gone by now! (Michigan has one of the quickest tax foreclosure processes in the country.)
She, herself, even stated that a reverse mortgage was the (simplistic) option
to (get the cash needed to) prevent foreclosure of the home (and allow M&D to remain).
She wasn't entirely wrong... but this approach is still not addressing the question
of HIGH taxes ($6K vs $260K value) and overall affordability.
Even if the current problem is sorted ...can the folks afford to remain there?
Especially if they don't have any investment income or more than SS as income.
Quote:
At this point, what kind of lawyer do I need to find? Bankruptcy? Real estate?
New to the forum and could use some guidance. Recently, I have found out that my parent's have been unable to keep up with property taxes and now are trying to be foreclosed. They are 66 and 62 who are currently living off of social security. The property taxes are about ~$6k a year. They currently owe ~$60k in both property and judgment lien. The house, however, is completely paid off, and has a net of $260k. My parents recently got served from the property tax lien company and is now trying to foreclose the home. My question is - would a reverse mortgage be the best option for them? I have been trying to do some research on the RM and it seems like a good option - but I don't know if there is anything "hidden" I should know about? I would also imagine that my parents would want to stay for probably another 3-4 years max and downsize afterwards as the home is too big for just 2 people.
Any input or help would be great. Thanks.
I say they should investigate selling and downsizing now. Maybe a small home, condo, etc. Something they can afford.
A Reverse Mortgage can be tricky. I think for one person alone, wanting to stay in their house, and needing a few bucks to make ends meet, then a Reverse Mortgage could make some sense.
jackmichigan and chet; would a home equity line of credit work? They could pay off the taxes; interest rates are dirt cheap, and they would have some breathing room to get the house ready to sell and not have to list it at a fire sale price.
Most states have a forgiveness statute as well...look into that. If your house is foreclosed on, there is often a time frame, where you can reclaim it once taxes are paid. That should be worst case scenario. Most taxing authorities will work with you, set up a payment plan....In Texas there is a deferral statute that allows taxes to be deferred until death of the homeowner if the equity is sufficient. It is basically a reverse mortgage with no fees...just a 5% annual interest rate....they place a lien on the house, and get paid first when the house is sold at death..must be over 65 or disabled though.
I personally think the house should be listed for sale quick....Get them somewhere they can afford. It's not worth losing much of your equity to attorneys fees. However, even in a worst case scenario, your parents don't just lose the home....If the taxes owed are $60,000 and the house sells for $260,000 your parents will receive the excess after the judgment is satisfied....That excess though will, in most cases, be reduced by the costs associated with the foreclosure proceedings.
However, even in a worst case scenario, your parents don't just lose the home....If the taxes owed are $60,000 and the house sells for $260,000 your parents will receive the excess after the judgment is satisfied....That excess though will, in most cases, be reduced by the costs associated with the foreclosure proceedings.
You're a lawyer, but you should be very careful about offering such blanket statements. Unless you specifically know about Ohio law, that may not be the case. I know that in Michigan, if a house is lost through tax foreclosure there is NO redemption period and there is NO ability to recover any value above what was owed in taxes (absent a legal challenge as to process). All value is lost--even if the property sells at auction for 100 times the tax amount owed.
I have no idea what the legal requirements are in Ohio.
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