Foreclosures Help Information

Posts Tagged ‘Foreclosure Laws’

Second Mortgage Foreclosure Laws

Question: Please only answer if you know real estate law and foreclosure issues?

If a servicing company bought a foreclosure property and then sold it at an auction, would the title need to be cleared first, paying off both the first and second mortgage? If not, why not, if so, how can I be sure? I had a second mortgage on a property that sold without paying me off!
The second was a "free standing" loan, however it was considered a second mortgage and was listed on the county records as part of the original sale before going into foreclosure, does this mean that I could go after the original buyers of my home, because it was listed as free standing? Thanks!

>

Answer: A 2nd lien holder must always be the first to foreclose. Even if only by one day. So you can protect your interest in the property. Once the 1st lender forecloses, you are wiped out.
In some states, you can go after the debtor. But only if the loan was not a "purchase money" mortgage. That would be if you loaned them money after they already owned the house, not at the time they bought it.

New York Bankruptcy - Second Mortgage Loan Modification in Chapter 13 Bankruptcy

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Florida Mortgage Foreclosure Laws

Question: Foreclosure questions?

I live in Florida and I just received a summons from my mortgage company and it says I have 20 days to respond. Does anyone know the process of foreclosure and can I still save my house with a loan modification? My bank isn't open today and I have so many questions if anyone know anything about the law here in Florida or the time I have I would really appreciate the feedback. Also I heard something about filing for bankruptcy would help???

>

Answer: You should take a simple letter down to the court house stating that you are aware of the summons and that you are trying to work it out. they can (but dont always) speed up the foreclosure process if you do not file that.

you will have 3 months until a motion for final summary judgement is filed. that is the amount that the bank will ask for at the actual foreclosure.

right now it takes another 30 days for the final summary to be set. Once the final summary is set it is another 30 days until the foreclosure.

in essence you are looking at 5 months before foreclosure. you can still negotiate with your bank yourself. call them up they have a special dept just for that.

the bank can streamline a loan modification for you. they will usually ask for a 2-3 months worth of mortgage payments up front as an act of good will.

i have heard of people waiting a couple months to save up some extra cash before calling the bank. just be careful if you do anything like that to not wait too long. the bank needs 2 weeks to do their paperwork.

Mortgage Foreclosure Process

Foreclosure Laws In Nevada

Question: after foreclosure, can your mortgage company make you pay what they lose in a foreclosure sale?

I have a first and second mortgage (to avoid PMI) and I am wondering if, after foreclosure, if we are going to be liable finacially for the banks loss, or the difference between our loan balance and what they get in the foreclosure sale? I know that our credit score will be affected, but I am wondering if that is the only repercussion? I also know the laws are different in states I am in Nevada anyone that knows the nevada foreclosure law specifically would be great. I am also wondering once we move out, assuming we do so before notice to evict what role will we, as the homeowners, need to play in the foreclosure process? I have heard that you must fill out a 1099 form for taxes? saying the difference between the amount owed and what the bank gets is roughly 30,000 what would that mean we pay at tax time?

>

Answer: Yes, the mortgage company can go after you for difference between the amount of sale at foreclosure and the amount you owe them. This is called a Deficiency Judgment and Nevada does allow for these judgments. Some banks will do this, some won't. It's totally up to them.

The tax implications come from another process that the bank could choose to do. They can choose to forgive the debt you owe to them. When they do this there is no Deficiency Judgment against you. The bank will issue a 1099 form to you and the IRS. This form basically states that you received X number of dollars as income from the bank. This "income" is the amount of money you owed them but they never chose to collect. The IRS treats this as income because the bank, in effect, gave you the money by forgiving your loan. You will then owe taxes on this income. Depending on your tax bracket you could owe anywhere from $6600 to $10,500 to the IRS for a $30,000 forgiveness.

Just as a note, it's best to try and work with the bank before they file a foreclosure with the courts. You will save them a lot of hassle if you choose to do a deed in lieu or a short sale. Once it goes into foreclosure court then you are getting yourself in a really bad place.

This site has the basic information on foreclosure laws for Nevada - http://stopforeclosure.com/Nevada_Foreclosure_Law.htm

Good Luck!

Nevada Foreclosure Laws - How to Stop Foreclosure