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What Happens if You Abandon Your Home and Let It Foreclose

Updated on April 21, 2016

What Happens if You Abandon Your Home and Let it Foreclose?

When you are facing foreclosure, it can be tempting to just give up and walk away from the home. Before abandoning your mortgage, you should consider the possible consequences of letting your home foreclose. Sometimes abandoning a house might seem like the best option, but foreclosing on your home often does more harm than good.

Besides losing your home and possibly having no place to live, allowing your home to be foreclosed will dramatically affect your credit rating and make it more difficult for you to qualify for a new loan in the future. There are also tax consequences of foreclosure that you should be aware of before you make the decision to let your home go into foreclosure.

So what happens if you abandon your home and let it foreclose? This article will help you understand what the consequences will be if your home ends up being foreclosed. It will also give you an idea of what to expect and offer some options for those who want to try to save their homes and avoid foreclosure.

The Effect of Foreclosure on Your Credit Rating

You may be wondering what happens to your credit with a foreclosure. You are probably aware that a foreclosure will hurt your credit score. How much it affects your score can vary, but keep in mind that every late payment will show up on your credit report. Also, when your home does go through foreclosure, an entry will be made in the section of your credit report that covers legal actions.

A foreclosure tends to affect your credit score more if you have very little other debts. If you have credit cards and car payments that are all up to date, this can help buffer the effect of the foreclosure on your credit rating. However, if you have few other items on your credit report, or those bills are also falling behind, the effect will usually be much greater.

The foreclosure and late payment record can remain on your credit report for up to seven years, but that doesn't mean that you will be unable to get a loan for seven years. As soon as your financial situation improves, you should start making an effort to pay every bill you have on time. Many people find that after as little as two years of doing this, they are able to qualify for a new loan.

After going through a foreclosure, it is likely that you will need a large down payment next time you borrow money to buy a home. Your interest rate is also likely to be higher. Keep in mind that government programs such as Fannie Mae and Freddie Mac are unavailable to people who have had a home foreclosed within the past two years.

If your foreclosure was not caused by an injury or other unexpected circumstances that prevented you from being able to make your payments, perhaps you have issues with debt management that should be addressed. Companies like Freedom Debt Management can help you eliminate your credit card debt and eventually rebuild your credit so that you will be less likely to get in trouble with your debts in the future.

Deficiency Judgments

One question that is asked often is, "If my house is foreclosed, can they make me pay?"  In many states, the answer is yes.  This is happening much more often now that it used to.  The reason is that real estate prices have fallen, so it is much more likely that your home will be sold for less than the amount of the loan.  If your state allows deficiency judgments, the lender can come after you for the difference between the amount you owed on your mortgage and the price the house sold for at the foreclosure auction.

The Tax Consequences of Foreclosure

One thing many people don't realize is that there is often a tax penalty that goes along with foreclosure. What happens is, if the house sells for less than the amount owed, the rest of the loan balance is considered "forgiven."

The IRS looks at this as income because it is something you would have had to paid but are getting out of. As a result, you may be taxed on the difference between the amount you owed and the amount the house sold for.

It is a good idea to talk to an accountant or tax lawyer about the possible tax consequences before you allow your home to foreclose.

Other Real Estate and Property

One thing people often worry about when facing foreclosure is whether the lender will be able to take other property and real estate that they own as well. Because real estate loans are secured by the property that is being financed, that property is usually all that the lender can take. However, if you specifically listed another piece of real estate as additional security when you applied for the loan, that property can also be taken.

When your lender forecloses on your home, your personal property is not included in the foreclosure. The lender has no claim on any property that is not permanently attached to the house.

Options for Avoiding Foreclosure

Instead of walking away from the house, it's a good idea to contact your lender as soon as you start to have trouble making your payments to try to work something out. Many lenders have programs available to help homeowners who are going through short-term financial difficulties. By working with your lender, you may be able to stop foreclosure on your home.

Deed in Lieu of Foreclosure

If it looks like you will not be able to work out a way to keep your home, some lenders will offer a "deed in lieu of foreclosure" or "cash for keys." If you can get your lender to pay you to move out quickly and leave the home in good condition, that could help you pay the cost of moving into a new home. However, a deed in lieu of foreclosure usually has about the same effect on your credit rating as an actual foreclosure.

Short Sale

One alternative to abandoning your home is a short sale.  Unfortunately, you need the bank's cooperation to do it.  When you sell your house in a short sale, the bank agrees to accept the amount that the house is selling for as full payment on the mortgage.  Some banks will not do short sales at all, and those that do will make you jump through a lot of hoops and fill out tons of paperwork to get the sale approved.  As a result, short sales are rare.  However, if you can do it, a short sale is better that letting your house go into foreclosure.

Loan Modification

A loan modification is an agreement between you and the bank that changes the terms of the loan.  It is just about as hard to convince a bank to enter into a loan modification agreement as a short sale, maybe harder.  If you pursue this option, it is a good idea to have an experienced attorney or loan modification company help you through the process.

How to Foreclose on Your Home

I see a lot of people searching for how to foreclose on a house, so I'll take a minute to address that question. Obviously, if you don't pay on your mortgage, your home will eventually be foreclosed, but I think if you are searching for information on how to foreclose your home, what you are really asking is whether you should tell the bank that you are letting your home go into foreclosure.

The answer to that question is that it is entirely up to you. You can tell your mortgage company that you can no longer pay the payment, or you can just stop paying it. If you notify the lender, you can expect the foreclosure process to start sooner than if you don't, so telling them may not be in your best interest. What happens when you foreclose on a house and can't find another house to move into before you have to vacate the premises? You will need both time and money in order to move. You may find that you will be better off if you try to delay the foreclosure while you save money for rent and moving expenses.

What Happens In a Foreclosure?

So what happens when you foreclose?  That's a good question.  First of all, once you have started falling behind on your payments, you will get a notice that your payment is past due.  You may also start getting collection calls from the lender.  The mortgage company may continue sending past due notices for two to three months before starting the foreclosure process, or they may begin foreclosing as soon as you are late on your mortgage.

Notice of Default

The foreclosure process varies from one state to another, but all states require some sort of notice before the bank begins foreclosure proceedings.  This may be called a "notice of default," "notice to accelerate," or "demand letter," depending on where you live.  In most areas, you'll have about thirty days to catch up on your mortgage before the lender can take further action to foreclose on your home.

Notice of Foreclosure Sale

After you have been sent a notice and the waiting period has expired, the lender can set a date to sell your house at a foreclosure auction.  They may be give notice of the foreclosure auction date by mail or by posting at the home, but in most places it is done by publishing a public notice in the local newspaper.  Once the notice is published or delivered, you will no longer be able to save your home by bringing your payments current.  You will now have to pay the entire loan amount in order to stop the foreclosure.

The Foreclosure Auction

At the foreclosure auction, bidders will be given a chance to bid on the home.  If the high bid is equal to or greater than the amount owed, the high bidder will take possession of the home following the redemption period, if there is one.  Otherwise, the bank will end up taking ownership of the home.

The Redemption Period

In many states, there is something called a "redemption period" in the foreclosure process. How this works varies from one state to another, so you should check your state's foreclosure laws to find out whether you will have a redemption period, and if so, how long it is.

If there is a redemption period, you will have a certain period of time after the home is sold at auction during which you can come up with the balance owed on the home and redeem the home. The redemption period is often between 6-12 months.

This gives the homeowner a chance to try to find a buyer for the home in order to pay off the loan balance. Even if you cannot find a buyer, you are entitled to stay in the home during the redemption period. During this time, you are basically living rent-free in the home. It's a good idea to use this time to save money to rent another home or apartment.

What Happens After Foreclosure?

Now that you know what happens when you foreclose on a house, you might be wondering what happens after home foreclosure. Once the redemption period is over (if there is one in your state), the bank will assume ownership of the home. It becomes part of the bank's REO, or real estate owned, inventory.

Bank-owned homes are typically listed with a real estate agent just as any other home would be. Foreclosed homes usually sell for less than other homes because they are often neglected during and after the foreclosure process. As a result, they are typically in need of some TLC by the time they hit the market and do not bring as high of a price as other homes in the same neighborhood.

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      rita jones 12 days ago

      yes I ow more on my house than it it worth ,can I just walk away ,Or will I have to pay income tax ,I am 82 year old have not filed in years what about that

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      GESD 4 months ago

      My husband and I purchased a manufactured home in 2014, ever since the house has been falling apart, and the mobile home place who built it never has done anything about anything time after time we call them! We reside in Louisiana, and we are so tired of fixing a leaking roof and mobile home we didn't receive new in the first place! We've shelled out thousands over the last 2 years for this house, and out mortgage company, 22st mortgage, keeps charging us property tax, when we live in a mobile home park and do not own any of the land. My husband and I are on the loan, and we've lost both of our jobs. And can't afford to pay the note any longer, and gave just found out termites have infested our home. And the land around us, and we are looking at thosands more to fix up more things in the home and for extermination for land we do not own! What will happen once we let the house go? As we are sure we never want to go through the trouble of crappy home manufacturing companies or mortgage holders! We will rent for many years to come, before we invest in anything again. Thank you!

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      greatgooglymoogly 4 months ago

      What if you owe more on your home than what it's worth? The back third of my home is sinking and cracking, built on the edge of a pretty steep hillside and neither mine subsidence nor home owners will help me. I can't afford to put $20K or more into it and it's a dammed if you do, dammed if you don't situation. What am I supposed to do?

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      Brook 7 months ago

      Hello I just found out today that my foundation is messed up, badly. I have lived in my home for 3 years and i am bettingnit was this way when i bought it. I am at a loss for what I should do. I just paid 10000 for my mothers funeral a few months ago. I have no money saved and if it doesnt get fixed soon he said my how will basically pull apart due to it fallinh in 2 places. Idls foreclosure or bankruptcy a good option for me

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      ourLOCALbankROTSo 8 months ago

      @Scott:

      Which bank was holding the mortgage (on the home of yours that they foreclosed on)? (OR I should ask, which bank do you work for??)

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      Scott 8 months ago

      I found myself in 2005 in a very bad spot with my mortgage and job situation. I was going through a divorce as well and seemed like everything was falling apart. My wife moved into an apartment and I moved into another. We opened our home to an estate sale and cleared it out. We left the property in pristine condition. The lender didn't have to chase us down or deal with a house in disarray. It was clean and in the end... the foreclosure never, ever showed up on my credit report at all. In fact, the opposite. It was closed out as paid for some reason. Maybe an error on someones part but nonetheless I was able to buy a new home and use my VA Loan several years later when I was on my feet and had a new family started. Odd, can't explain it, but it worked out for me to just walk away.

    • bethparker profile image
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      bethparker 8 months ago from Grant, MI

      Becky, my advice would be to evict him. Eviction laws vary from state to state, but it is not usually difficult or expensive to do.

    • bethparker profile image
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      bethparker 9 months ago from Grant, MI

      Becky, every state has an eviction process you can follow to get someone out of your home. It is difficult to do this to your own child, but you need to do what's best for you. In most states, it's fairly easy to evict someone. Make sure you file and serve the paperwork properly, then show up for court. Most tenants don't show up and lose by default. Once the hearing is over, if the tenant does not leave, you can have the sheriff escort him off the property.

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      Nordic233 11 months ago

      Wow Beth Parker, not only did I find you article informative but also the questions that followed your article and all the answers that you provided for those questions. Now if I may, I have a question that I would like to ask you and maybe you can help me as well. First, let me explain that the help that I am seeking is not necessarily for me but for my 38-year-old daughter who has two young children and her home is in foreclosure. To understand a little bit of the background I am 65 years old and have worked all my life and I own a home that is paid for. That is all I own and I have nothing except Social Security to live on so I am not in a position financially to help my daughter in anyway. My daughter has always been a responsible person in her younger years when she was single. My daughter has been married twice with her first marriage ended in divorce of which my daughter retained custody of the children who at that time were only one-year-old and 2 1/2 year-old. Approximately two years later my daughter met another gentleman and ended up marrying him who at first seem to be a wonderful person. This man was older than my daughter and supposedly was as successful insurance salesman that was in the business for more than 15 years. Together they purchased a Home that I personally felt was more that they could handle but they chose to do it anyway. Her husband surrendered is 401K in order to come up with a $50,000 down payment on a $325,000 home. I later learned that her husband's income was based upon a draw where he worked and it was around $80,000 a year. My daughter is income was roughly $35,000 a year so that was their entire combined income. In the first two years this man was a wonderful person to my daughter and to her children. In fact, he probably was better with the children then their own natural father to some degree. The children's natural father would visit with them and still does every month and he pays my daughter at child-support of approximately $1000 per month. Lo and behold as time advances her husband basically was a con artist and he even coned me. Without my knowledge this man asked my wife if he could borrow some money from her to find something for the house. When the bills came he told my wife to just throw it in the trash because he would pay the balance on a monthly basis on the Internet. This credit card was a credit card that my wife had as a spare credit card in case of emergencies. I also didn't even know she had this credit card and I was never informed that she lent it to him in the first place neither was my daughter aware. So my wife, never thinking to doubt her son-in-law just basically threw away the bill every month without even opening the envelope thinking that her son-in-law is paying the bill online. After about a year my wife starts to wonder why this bill is still coming to her and she decides to open it. Upon opening it appears that the balance on this credit card is $17,551.00. When my wife told me about this I was in shock and all and one questioning my daughter she also flipped out when I told her this as she had absolutely no clue that this was happening. He literally stole money from my wife and use this credit card without authorization. When reported it to the credit card company I told them that I knew the person and when I mentioned it to them that it was my son-in-law and asked if they would kindly not call the authorities for two days to allow me time to discuss this, they agreed. This of course was the final blow that led to a second divorce. Upon questioning him he only was able to tell me how sorry he was and I gave him 30 days to pay this balance in full or he would be turned over to the authorities and charged with a felony crime and he will go to jail. He begged with me to allow him to pay this off and I absolutely refused and told him he has 30 days and to not say anything more because if it does not happen I will report him and he will go to jail. I guess that worked and somehow he managed to pay me off. I have no clue how he achieve that and I honestly don't care awls I know is he did settle that bill. This literally destroyed my daughters relationship with him and he ended up living in the basement of the house during this time. It then got to a point where it was just unbearable and he decided to pack a suitcase and he just walked out of this house all together without any forwarding address of where he was going to be. I'm presenting the short story to you but just prior to leaving the home the divorce was finalized. It has been two years since he has left the house leaving no word as to where he is and leaving the entire home to my daughter to try to do what she can do. My daughter earns about $40,000.00 a year. She has been a year and a half into foreclosure and has no way to pay this bill at all in addition to all of this she has health issues with not so good insurance and ends up with a lot of money coming out of pocket to pay for her health bills. I help her when I can but even I cannot do all that I would like. She is represented by an attorney which again is another bill that she has to pay and the only step at this point is to file bankruptcy which would give her a little bit more time in the house and she is beside herself and so am I as to what to do she can't even get car insurance unless she pays like $500 a month because of the foreclosure . In the meantime all of this is falling on my daughter who did not create this mess in the first place. After he left the house it was later determined that he did not file federal taxes for three years with two of those years being married to my daughter. This of course has caused the IRS to garnish her tax return. I don't expect you or anybody else to give me the answers as to what to do but what really bothers me and hurts me till no end is how this man can walk away from his house, abandon his financial responsibilities, abandoned the children even tho they were not his, he had a bond with them that they don't understand and then appear to be totally absolved of any of this. It appears that my daughter is taking 100% of the fault and then hit having to file bankruptcy and everything else and because he doesn't even have a location to be located nothing seems to be happening to him and my question is why is it that way. Why does my daughter have to file bankruptcy, why not him. This is the part of this whole ordeal that I don't understand and I don't know how to help my daughter and eventually she's going to have to leave this house and I don't know what she's going to do and all I know is I don't want my daughter to live in a cardboard box and will do all I can to help her. Can you or anybody reading this lend any advice as to what to do?.

      Thank you for taking the time to read.

      If there are spelling mistakes it because of talk to text, sorry about that

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      Becky S 13 months ago

      About 15 years ago my mom bought a house for me and my 5 kids to live in with the agreement that I would pay for everything. I did and things were great until we started having some teen age mental health and domestic abuse issues. I had to abandon the house and take my younger kids away from the abusive one. He was allowed to remain in the home, but he has completely trashed it and it is in so much disrepair. Some "well meaning" friends say just stop paying the mortgage, but I cannot do that to my mom, she trusted me and I cannot do that to her. Any advice on what to do? It really is trashed and my son is still actually squatting there.

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      samriti gupta 13 months ago

      We just put a house under offer but the thing is that now bank is not giving us morgage what are the consequences we have to face .We havent signed any legal binding any advise please

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      Krysy 13 months ago

      My home has been in the market since April 2016 and no offers the price has dropped by 30,000 so far. It was suppose to be a short sale, but now it looks like I will have to let it go into foreclosure when I purchased the home I was married and had 2 incomes, since the divorce in 2012 I have been struggling to keep up on the house and make the payments on time. I am falling int further debt trying to make ends meet. My worry is my credit how fast I can repair it and if I will be able to find another place to rent after it goes into foreclosure. I know that I will have to rent for a 2-3 years before I purchase again and that is fine with me. I just don't want to end up homeless with children. Does anyone know of any rentals or properties in MN that are willing to work with people??

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      April 14 months ago

      We are in the process of building a new home. We are trying to sell our current home but not having any luck. We will not be able to afford 2 house payments. My husband's name is only one on the loan for the house we are trying to sell. Both our names are on the loan for the one we are building. We are to close at the beginning of August. If we do not sell the house, could we walk away after we close on new home? Would it affect anything besides his credit?

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      Diane 15 months ago

      We had consigned on a loan for our son and daughter in law. If they decide to foreclose I know it will affect our credit. Can they come after anything else we own like our own home? Would the tax implications be split 4 ways?

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      Jeff 15 months ago

      I moved to another province three years ago for work. I made the mistake of buying another home right away thinking I can sell my old one. I fixed up the home and have lowered the price four times. It is located in an area that lost all three of its industries. I have never received even one offer and its is a nice home. Three years later I still haven't sold it. I suppose I could rent it but if anything goes wrong I can't afford to fix it. I have been paying two mortgages for three years. I am so fed up and I don't know what to do. Any helpful suggestions???

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      Brad 2 years ago

      I have friends who abandoned their home here in Point of Rocks, MD. He has a great job so income wasn't the issue...they bought the home in 2007 just before all heck broke loose and they were buried...they hung in there until 2014. Overall, everything has worked out. I think it just comes down to income...if you have the income you can get credit and get out from under much easier. They bought another home in WV at half the price and quickly abandoned their old home. It's a terrific place with lower taxes...and they can now put all kinds of money away to simply live and to re-build their credit. Again, my take away from all of this is that in this economy...foreclosures aren't as punitive as they once were and that if you have income...somebody will give you credit even after a foreclosure. I was honestly surprised they were able to get a second house so easily.

    • bethparker profile image
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      bethparker 3 years ago from Grant, MI

      It depends on your situation. Financially, it is usually best to stay put and let the foreclosure go through. As soon as you decide that you are not going to try saving the house, start saving as much money as you can to move. Timing the move is tricky. You don't want to still be there when the sheriff shows up to evict you.

      On the other hand, in some states (not sure about Alabama), foreclosure can draw out for months, during which time you can be living in the house rent-free. I know that sounds a bit shallow, but most of these banks could work with people and choose not to, so I don't think it's unfair to take advantage of the time you are legally entitled to.

      However, if you find a great deal on rent, have the money saved up and are ready to move before you need to, jump on it. That great rental may not be available if you wait. Once you are completely moved out of the house and you're sure you won't need to get back in for any reason, go ahead and let the mortgage company know. This will give them a chance to keep an eye on the property (to prevent vandalism) and winterize the property to prevent broken pipes and water damage if they choose to do so.

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      Jason 3 years ago

      Hi Beth,

      I live in Alabama and, after trying for almost 2 years to work out something with my mortgage company to help me with a mortgage that is quickly burying me I have finally come to the realization that they have no desire to actually help and foreclosure seems my only option. Is it best to vacate the property and just let the foreclosure happen on it's own or should I let them know once i have vacated? I am scared of facing a foreclosure and possibly being accountable for any of that later but I am also scared of living in a home that i know i can no longer afford an it being taken from me leaving me and my son nowhere to go

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      bethparker 4 years ago from Grant, MI

      BellaTerra, I'd go with what your attorney says. He/she is the best person to answer questions about your specific situation. I'm not a lawyer, but it's my understanding that if your mortgage is included in the bankruptcy and the home is surrendered, the debt is completely wiped out.

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      BellaTerra 4 years ago

      I'm in NM. I filed Chap. 13, surrendered my house, and was discharged. I actually completed the Chap. 13. Now my mortgage lender, Bank of America, is making all kinds of threats if I don't pay my mortgage. Like deducting the monthly mortgage payment from my bank account. I've spoken with another BK attorney who says what B of A's threats are illegal and that B of A can't touch me. Is that true?

    • bethparker profile image
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      bethparker 4 years ago from Grant, MI

      Yes, you would lose all equity if you stopped paying payments. Theoretically, the house could sell at auction for more than you owe (plus legal and other fees), resulting in some sort of payment to you. However, that is extremely unlikely. Foreclosed homes almost never sell at auction for what they are worth.

      It might be best to wait until the divorce is final to do anything with the house. That way, you'll have a court order stating that the house is yours to sell (assuming you get it, of course).

      In the meantime, do you have an extra room or two you could rent out to another single mom for a little extra income? House sharing can be a great way for single moms to make ends meet by helping one another out.

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      Dallas 4 years ago

      I need advice. I live in a home that is valued at 219K. I owe 150K. The problem is I am going through a divorce and the jerk I'm married to was ordered out of the house a year and a half ago and does not pay any of the bills here. The house is in both of our names and I have begged him for us to put it up for sale because I not cannot afford it alone. He has put me off for a year and a half and I'm tired of the situation. I'm at the point of just stopping payments on it. Will I lose all the equity by doing so? I have no other options at this point. I am tired of living here as a single mom and paying out more than I make every month. He is willing to discuss or help in any way nor will he sign for a it too be put up for sale.

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      Keeley Shea 4 years ago from Norwich, CT

      Great hub! Lots of great information! I am going through a tough situation myself and now have more information to take into consideration when making my decision. Thanks!

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      Cathy 4 years ago

      My parents are in their 80's, my father has Parkinson's, and they are desperate to move to an assisted living facility. Their house hasn't sold, it's worth about $80K and they owe about $60K. They can't afford to move until the house sells. My brother told them to let the house go back to the lender. What are their repercussions of that? They don't have to worry about their credit rating because they won't be getting anything on credit. At this point, they don't care about any equity in their house - they just need to move somewhere where they can be cared for. Thank you so much.

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      Sheri 5 years ago

      My father recently passed away and the house he and my mother were living in was on the market to be sold for over a year and no offers. They were about 3-4 payments behind on their house payment. Now that my father has passed away my mother defineately cannot afford the house. We were thinking of just foreclosing on the house but not sure if we should contact the bank or just move her out. Also the place they lived had HOA fees. If she just moves out what happens about the HOA fees?

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      RICHARD 5 years ago

      thankyou again for all your info , thats what we thought also,fyi citi mortgage is the worst took 10 months to get an anwser about a modification but we stopped paying house payment 4 months ago and saved all money so we are ready to find a new place. thanks again

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Richard,

      I'm not sure what happens if you don't move out before the foreclosure sale, but since there is no redemption period, I'd play it safe and make sure to get my stuff moved out before the sale.

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      RICHARD 5 years ago

      Beth i got a notice of foreclosure sale do i need to move out before this date the date is 8-7-12.

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Hi Richard,

      No, Georgia does not have a redemption period. Find more info about Georgia foreclosure laws here: http://www.foreclosure.com/statelaw_GA.html

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      RICHARD 5 years ago

      hello beth could you tell me if the state of georgia has a redemption period and if so how long is it? thanks

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      michele 5 years ago

      Hi Beth. We live in a 24 unit townhouse complex in CA. We have owners that have walked away from property yet left behind their 18 yr old son. The home is used as a flop house and the police are called often for late partiers etc. But we are told since he is 18 he can live alone. What can we do as homeowners and what can the. HOA do? They are excessively behind in mthly dues and now we are paying water to wash his pals! Very problematic and would appreciate any info. Thanks so much

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      Ron Molchanov 5 years ago

      i have a condo for 9 yrs bought at $150,ooo but now worth maybe 100,000 AND what are the issues i would face if i foreclose ? would i receive a 1099 from the irs.

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      Jay in Fl. 5 years ago

      Hi Beth. I own a house that I used to rent out. I never made enough money to cover the mortgage. So now I want to short sell the house. I want to know how or if I can protect my stock in vestments if the short sell is accepted or if the house goes into foreclosurer? Thank you

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      smokeybear4gfc 5 years ago

      My sister is in a situation, she has been joblees for 5 yrs, she was current on an upside down mortgage for 15.5 yrs no late, nothing. She used all her unemployment, all her savings, 401k, every penny she had to stay current. Now they are 3 months behind on a trailer that is 16 yrs old. It is on the mortgage alone, meqaning there is no land attached to it. The land belongs to my Aunt. The woods have grown up so much that there is no way to remove this trailer from the property withut major cutting which my aunt will not allow to happen, Question, if it goes to sale or repo, what could happen. Thay can sell on the steps but no one can get it out and no could live there unless it was them. They are in Ga.

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Bobby, it might not cost you as much as you think to fix that roof, especially if you're willing to do it yourself. Try searching online for instructions and talk to the people at Home Depot (or wherever you buy the supplies) if you're not sure about something. Sometimes they can be very helpful.

      If you don't think you can do it yourself, how about friends and/or relatives? If you buy a case of beer and some hot dogs, you might be able to get some of them to come out for a work day and get it done. You might even have fun in the process. :)

      Good luck. I do hope you'll be able to keep your house.

    • profile image

      bobby 5 years ago

      im 24 making 18000 a year, just found out my home needs a new roof, my insurance companies have dropped me, and i cant afford to fix the roof, just bought home a year ago, should i foreclose? i've struggled with this for a while, i can go back to rent, pay off my credit cards, i just put a new heat and air in $7500 on credit, this has been a disaster for me, i was too broke to buy a house and im even broker trying to maintain it what should i do, i am current on all my debt, and would only foreclose due to not being able to stop the leaking roof

    • profile image

      Michelle 5 years ago

      My husband bought out home 6 yrs ago now obtaining a mortgage and a ballon rider mortgage. The ballon was modified 2.5 yrs ago in order to extend the period before payoff. My name is no where on the house. We just got married this past Dec. and we are in a situation. The payments are high and the ballon needs to be paid off in 2.5 yrs which is impossible. We tried to refinance in order to combine the loans but our house came in $65k lower than 3 yrs ago. If he forcloses on the home and I purchase a new one for us to live in... Can they come after my new home? This foreclosure will only affect his credit, not mine. We live in IL and there are so many foreclosures around us we don't know if it's the smartest option. We just know $2,600 a month plus having to pay a lump sum of $38k in 2.5 yrs is not an option any more. The banks refuse to help us since we owe $280 total and it's only worth $250 now. Any advise is appreciated!

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Talk to a foreclosure lawyer.

    • profile image

      onwillowbay 5 years ago

      My husband and i owneda house in FL. 3 mortgages totally 330,000. Husband got cancer and filed bankruptcy. (I was not on the loan..only on the title). Bank of America started foreclosure procedings in 2008. STILL NOT FINAL. BofA changed the locks immediately while we were in PA dealing with cancer treatments. I have been unable to get into the house to retrieve personal belongings. What can I do? BofA will NOT change the locks and used scare tactics on me "if I chose to do that"... Do I have any recourse...?

    • profile image

      katlin 5 years ago

      I have a question... my bf bought his house before market went down its a small 2 bedroom 2 bath.. he owes like 120 on it but now its most likly worth if were lucky 80.. he recently lost his side job which pays half the monthly pmt.. weve been looking into what we can do to save it but the bank so far is not very helpful..

      Thanks

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi Hope,

      He really needs to talk to a lawyer who specializes in foreclosure. The bit about paying to clean the house out sounds really fishy; I've never heard that one before.

    • profile image

      hope 5 years ago

      My fiance and his ex wife had a house together, in the divorce the court gave her the house and said she had to get his name removed from the mortgage. His name was removed from the deed but she moved out of the house stopped paying the mortgage and this is going on two years ago. His name is on the mortgage and now they are calling him saying he owes them 15,000.00 dollars and if he doesn't pay that he has to at least pay to clean the house out, which is her stuff not his. She refuses to deal with the situation at all and we have no idea what to do we would like to someday buy a house but with this house situation it seems we will never be able to. Do you have any idea what he can do because he was told he is not liable by the divorce court.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      If the mortgage is discharged in bankruptcy, they will not be able to get a deficiency judgment. However, the house will be sold by the bankruptcy court to satisfy your debts. It's usually better to wait until after foreclosure to file for bankruptcy because in most states, you can stay in the house for several months while the foreclosure is in process and use that time to save money to help you start over again somewhere else. You should discuss your options with an attorney who is familiar with both bankruptcy and foreclosure to help you determine what is best.

    • profile image

      thanks/Virginia 5 years ago

      beth I recently graduated and am not a homeowner although I look to become one in the next few years. I just googled this page to learn what foreclosing meant and other terms. I just think it is so great of you to be providing advice here. So many people have to go through this trying experience of losing a home and going into debt, but it must mean so much to them that someone is willing to hand out professional advice to guide them thru the mess. thanks so much

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      It depends on whether you include the house and mortgage in the bankruptcy. Talk to a bankruptcy attorney to be sure.

    • profile image

      rich 5 years ago

      if i just file for bankruptcy wont that wipe out everything?

    • profile image

      RICHARD 5 years ago

      after you foreclose how long does it take for the mortgage company to do a deficiency judgement,and so if am foreclosing on my house i should just wait till i get a deficiency judgement on my house before i file for bankruptcy??

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Your credit is probably already screwed either way. But yes, if they have a deficiency judgment against you, they can garnish your wages. Your choices are bankruptcy (to wipe out the debt), settlement, pay the full amount due, or take your chances with them coming after your bank accounts and wages.

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Yes, Georgia allows deficiency judgments.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Definitely wait until after if deficiency judgments are allowed in your state. Wait until the lender gets a deficiency judgment so you can get it wiped out. If you file for bankruptcy first and then they get a deficiency judgment, they can still come after you for the amount of the judgment.

    • profile image

      rich 5 years ago

      should i file for bankruptcy first or should i let the house go into forcloseur,then file for bankruptcy?

    • profile image

      Hugo 5 years ago

      Great article! I'm trying to deal with the aftermath of the foreclosure. I had a first and second mortgage. Both of them have been sold to other companies. They have been contacting me for a while to pay the balance. I don't have the property and they still want the money. Is this something that can be ignored or should i try to work something out with them? I know of them offered to bring the amount down to $5,000 from $56,000. Will they be able to garnish my wages in the future if i don't do anything? How this affect my future credit if I don't do anything?

    • profile image

      Worryaz 5 years ago

      Hi. My husband and I currently own our home, but are about 40-60,000 upside down. We can afford to make the payments, but it leaves us very little room. I am only working part time after having our first baby. We have recently been in a situation where we could pay cash for another home under $100,000 and we would love to move with a house with property. But... we are stuck here where we don't want to be. Would it make sense to foreclose???? We do not want to rent our home. We can't short sale, as I was told the bank would come after all our assets, and we definitely can't sell it for what it's worth. Our only option is to foreclose but I feel so awful and wrong about it..... please help!

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi Mark,

      Yes, if the bank is filing for a deficiency judgment, that means they are trying to collect the balance of the loan. I'd talk to a lawyer to discuss the possibility of filing for bankruptcy.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      No lender is going to send you a 1099c without foreclosing on the house first, unless they made a huge mistake. No, you don't keep the house. A 1099c is issued if there was still money owed on the house after foreclosure and the lender decided not to go after a deficiency judgment to collect it.

    • profile image

      fred 5 years ago

      do i retain ownership of my home, after i file the 1099c?

    • profile image

      marge 5 years ago

      my husband and i are recently going through a modification on our house. We recently was looking into the process of a short term. i think it would be better for us. My question is can we do a short sell even though we are going through a modification or is it to late?, and if its to late can we wait a couple months and do it later?

    • profile image

      tricia 5 years ago

      From texas, My husband and I are considering foreclosure. Weome for 11years and we have always made our payments ontime. I'm now on disability and we can't afford this home. House is in need of repairs and aside from that. I can't get benifits such as medicare, medicaid because we have a mortgage. So what's more important. My health or this house. I hope you can offered some advice..

    • profile image

      tricia 5 years ago

      My husband and I are paying on a mortgage in texas. I'm receiving bdisability but cannot get any other benifits such as medicare,medicaid because we have a home. Our credit is good

    • profile image

      Cathie 5 years ago

      I do think we as homeowners can make a different ourselves?

      Lets help those who are close to short sale,or foreclosures.

      My IDEA is to exchange properties?

      Make a deal with another homeowner who has a manageable mortgage you can afford and have a roof over your head. Then there is the consumer out there with job security wants a bigger house,who could afford that mortgage you know longer can pay.?

      It is just a matter of getting these people together and

      all will be happy and maybe we can start something and keep people in a home. I believe we can do it? Lets keep

      out government and realtors and just make the deal with a lawyer? Watch the WEB trying to get soething out there on this idea!!!

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Ingridia,

      I am not sure I understand your comment, but the baby has nothing to do with the foreclosure timeline. Having a baby does not give you any extra time.

      Good luck.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      TK in PA,

      Don't count on the short sale going through. Sometimes the banks will string you along while continuing the foreclosure process in the background. You can find a link to the foreclosure laws at the bottom of the foreclosure.com site to find out whether a deficiency judgment is permitted. If not, then the camp property should be safe as long as it's not secured by the same mortgage.

      Whatever you do, don't put it in your kids' names right now. That looks like fraud, whether it is or not. If the bank gets a judgment, most of the time they can just put a lien against your other properties, not foreclose on them. Check with a lawyer to be sure. Also, check to see if you can eliminate the deficiency judgment through bankruptcy.

    • profile image

      ingrida 5 years ago

      I am pregnant and give birth to maturity for me tomorrow and we rent the house , and said today that on Saturday come see buyers House,they make me so quickly emptied the newborn?sorry if I ask, not here but do not know what to ask and where,thank you

    • profile image

      tk in pa 5 years ago

      Hello Beth, very informative and helpful info. How long should we keep paying our first and second mortgages while we wait to sell our underwater house in the short sale process ? Also can the bank go after our fishing camp property if we go on to a foreclosure on our main residence ? We are thinking about putting the camp property in our children's names if we have to. Please clarify if you can. Thanks.

    • profile image

      JasonAndKristina 5 years ago

      We live and rent in California. My wife has a rental property in Arizona. She pays 1000 a month. We don't see the value going up any time soon and the renter currently only pays us 300. we end up paying 700 additional. We're thinking about walking away from the house, but I'm worried that when we do buy our own home in CA, will the bank will come after our property or savings, CD, 401k?

      I have seen that Arizona is a non-recourse state, so i just wanna make sure that the banks cannot go after us once we let the house foreclose. Do you have any insight on this BethParker? I appreciate any insight.

    • profile image

      luther 5 years ago

      what happens if i forclosed on my home and i ckecked and it sold for more than i owed about 10 grand more

    • profile image

      emdirtmiami 5 years ago

      I have a house and credit card is with same lendor. I'm paying on the credit card but can't afford the house. Will they take the credit card from me that I owe on or allow me to continue to pay on the credit card which is nearly $9000 that's owed

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Stacy,

      It will take at least two years to rebuild your credit, but you will be OK.

    • profile image

      Stacy 5 years ago

      My husband and I are considering walking away from a house we dont live in anymore. We bought another house about 1.5 years ago, and rented out the other. We tried selling it before that, it didnt sell. It is now become a liability to us and we are making No money on it. The rent doesnt cover the 1st and 2nd mortgage. We are scared. We have never NOT made a payment. To just stop paying is so foreign to us. The roof is 27 years old. It makes NO sense to continue to pay on it. Will we be ok?

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      No, it won't.

    • profile image

      ianhatcher 5 years ago

      I was divorced last year and am the only one on the mortgage note. My ex-wife is on the deed though with me. My question is if I walk away from the home will it ruin her credit as well since she is not on the mortgage note?

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi Tom,

      That's totally understandable. It's always hard to start over again. Good luck to you.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Nikki,

      Wow, what a messed up situation. You need to talk to lawyer who has experience dealing with landlord-tenant law to find out if you can fight this. It's possible that it may be too late since there is already an order for eviction.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi z,

      Unless things have changed since I took the real estate course in Michigan, you have at least a six-month redemption period in which you can stay in the house AFTER the foreclosure, maybe longer if you have a lot of land. If you call the lender and tell them you are leaving, you could lose out on that extra time. Your best bet is probably to just stop paying and start saving the money toward a new place. Even if you don't wait out the entire redemption period, you could still save up enough money to cover a security deposit, first month's rent, and maybe even a U-Haul by the time you're ready to move.

    • profile image

      Tom Tom 5 years ago

      Ok. My bad. I haven't read all the messages. But yes, that's what I did. I'm starting over. Personally, it's just hard at my age..47. I just wanted to live to retire at fairly young age and enjoy life. Now I don't think that's going happen. I'm not a deadbeat. I've worked hard all my life and did not need to loose everything. I try not to be hostile about it but it comes out every so often. I'll get over it but it's still rather fresh.

    • profile image

      Nikki 5 years ago

      Tenants and Foreclosure: On Rent Control and "Just Cause" Eviction

      Here's an interesting situation: We have rented from the owner of a condo unit. He owes is HOA for past due fees. The HOA puts a lis pendens on the property, but he walks away from the property. The HOA received an Order of Possession, and we were forced into a lease with the HOA. During our second lease, the unit was sold, and we were receiving notices of sale, and purchase. We also received notice of possession from the new owner, along with notices to vacate. We notified the HOA and gave them copies of the notices.We were told that there was nothing that the new owner could do, due to the lease being in place. Well, we are now being evicted (court ordered) due to BOTH leases being invalid/void because the HOA had no right to enter leases. Could I possibly get my money back, and if so, how?

      Also, even after being told of the ruling, and confirmed by the bank, the HOA is still trying to collect rent. Can they do this?

    • profile image

      5 years ago

      I am legally married, we live apart, neither one of us can afford a divorce, he lives his life, I live mine. My question is this, the home I live in is in my name alone. I have been laid off and can no longer afford my home. I want to move back in with my parents and give the keys back to my mortgage lender. I can not do this anylonger...I live in MI, can u tell me what will happen to me when I call my lender and tell them this? Can they go against me for anything if I don't have anything? The house was in my name alone!

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi Tom,

      I think you misunderstood what I said. LogicWorks was talking about leaving no forwarding address so that the bank would not be able to find him/her to collect. My take on that is just what you said--file for bankruptcy and be rid of the debts. After a foreclosure, your credit can't get too much worse, so why not take this opportunity to wipe out all of your debts through bankruptcy and start over with a clean slate? It's way better than living in fear that the bank is going to find you and garnish your bank account.

    • profile image

      Tom Tom 5 years ago

      Ok. Why would I want to pay a deficiency? It's not my property anymore. Paying it will gain nothing. It will not improve already shot credit rating. Besides, I , like so many others who find themselves unemployed, have other notes they can't pay either. Like a car not. If you're going to file bankruptcy, relieve yourself of all debts, then start over. BTW, when you file, your debts from an entity are wiped out; past, present and future. You're done with them. You don't have to wait for a deficiency judgement from any creditor.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      You are right, Tom. The banks could make this situation better for themselves and their customers too if they would just have a little compassion and try to work with people.

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      LogicWorks,

      If you're going to lose your house, why run from the deficiency judgment? Talk to a bankruptcy lawyer to find out what your options are as far as the debt goes. Your best course of action may be to wait until the bank files for a deficiency judgment (if they even do), then file for bankruptcy to wipe out the debt legally--and the rest of your debts along with it. Your credit will already be shot after the foreclosure, so there's no reason not to get a fresh start if you need it.

      Good luck.

    • profile image

      Tom Tom 5 years ago

      All this information is cute and all but there's one thing left out: it presumes you want the house. I've been thought this. After you fall behind, the mortgage company will be relentless in collecting. They harass you to no end. By the time I walked away, my credit had long been gone so I didn't care about credit. Once you fall behind (in my case I lost my job) this is very little way to get caught up. The house is gone. Period. once you been harassed by the mortgage company as long I was, I didn't want the house and property anymore. I didn't want to deal with them. The rude, mean, crude, unwilling to work with me and that tells me they would rather have the house. Ok. Now it's theirs. I wanted to work with them, they refused. The mortgage companies in America have NO right to complain or act as though they are the victims. They are NOT. I don't want another mortgage from any of them, anywhere. They will get their rewards by going broke in the end. GOOD! Let them.

    • Rocio Vazquez profile image

      Rocio Vazquez 5 years ago from Tolleson, Arizona

      Here is the situation that I am currently in. I live in a city in Az that has the highest foreclosure rate per capita of any city in Az. Also the market hit us second worst in the country. It appears financially the only option is to foreclose.

      Home facts

      Original Cost $325,000 in Sept 2007( right before bubble collapsed)

      Paid $15,000

      Loan $310,000

      Mortgage 2358.37 per month 6.25%

      PMI 176.00

      Currently paid in 52 months 122,512

      Current owe Jan 2012 291,332

      Principle paid 18,668

      Paid to PMI/Tax/Interest/Insurance

      103,844

      Ins 674.00 annually

      Taxes 1200 bi- annually

      To pay down to 20% to get rid of PMI amount owe has to equal 260,000

      Projected date to be at 20% current payments Oct 2017

      Total PMI paid at that time 21,120

      Current home value approximant - 114,000

      Depreciation since moving in 21.13% annually

      If current value started now to appreciate value of home at 5% annual increase in 25 years $375,000(projected if market turns)

      Total amount paid at that time $849,013

      Total loss on property

      $474,000

      In the short term would it not make sense to foreclose. Rent at 700- 1000 per month cheaper. Save money for 5 years. Walk in with possible 60K down.

      Basically I am renting now and have negative equity.

      At no time in the near future will I have any equity in my house.

      Projected date of equity if market corrects is in 2025.

      Even if bank were to lower interest I would have to pay down at 1% per point. To get it at 4% it would cost me about 6k plus closing. I can not refinace with another bank because I am 170k flipped on the house.

      BTW- I have never missed a payment.I am financial secure. Credit fine.

      In this situation does it make sense to even try to negotiate with the bank? I have been turned down by the bank three times when attempting as “I earn too much". The bank's words not mine.

    • profile image

      ianhatcher 5 years ago

      Hi,

      I'm in quite a situation on my home. I bought it in November of 2007 right before the housing crash. I recently got divorced and my ex-wife decided I couls keep the home. I have since discovered about $10,000 worth of Foundation damage in the home. I called the company that did the orginal foundation repair and they only did half of it. Apprantly the previous owner decided to take the cheap way out and covered up all the crack and just fixed it enough to make it look good.

      As it was over 4 years ago and I am upside down on my house as it went from 140k to 130k in an appraisal I am seriously considering just walking away from it. I can save $$ and live in an apartment for 2 years or until I decide to maybe re-marry or buy a house on my own.

      What worries me is what if the house sells for a significant amount lower then what I owe. To sell it now woudl cost me around 25k in restoration and realtor and closing cost fees. I'm almost thinking to just walk away. There are so many issues with the house that an inspector should have caught and I do not want to sell the house knowing that the issues are there and not fixed.

      Thanks.

    • profile image

      LogicWorks 5 years ago

      What happens if we leave the state, with no forwarding information? I know it costs about $35K for the bank to do its foreclosure paperwork, so is there a chance the bank would simply take the house, and not bother finding us, in order to garnish wages? We have added a second bathroom, replaced the roof and windows, and the house is in great shape.

    • profile image

      hannah 5 years ago

      Hi,

      I live in Georgia. My parents live in the suburbs in a 3bedroom 3bath house and they have lived there for about 16 years. They now are venturing out for a place bigger. Money is not a problem, but if they buy a new house then what will happen to the house they live in currently? I guess what I am asking is if they wait a year (which the bank will no longer own) then would it be possible to sell the house back to the bank? This might be a stupid question,but I am a orthopeidic doctor and I know little about housing. I just want my parents to avoid foreclosing.

      Thank you very much for subscribing!!

    • profile image

      Brandy 5 years ago

      I live in MI I bought my home in 08. We are now in the process of foreclosure. We are still waiting to find out how much it would be to get current with or loan. But my problem is this it's a small 4 bed 1 tiny bath house we have 3 kids and waiting to find out if there is another on the way. About 5 months ago I had a student loan garnish my wages so that what put us behind. The house is not worth the mortgage. The loan is for 69,500 the house is only worthy 35,500 so way under and not in a wonderful area. We really want to move but will happen?

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Andria,

      Your situation is very unusual. You should definitely think about talking to a lawyer.

    • profile image

      Mollyg 5 years ago

      Thank you kindly for responding to my post. It really helped but I have a question about how to find the information you wrote about. You said to look up the laws in my state to see how long I would have to remain in the house without paying the house payment. That would help as I was not sure where that money was coming from. I tried looking up forecloser laws but not sure what else or where else to look. The forecloser laws were really confusing to me. Thank you again for all your help. My stress level has been so high lately and it has just seemed there was no way out. Molly

    • profile image

      Andria 5 years ago

      Was in foreclosure and had a sell date on the home but in the middle of a workout option with the mortgage company.

      Sent all information requested EXCEPT the hardship letter (Although they had dozens on file because I had been in this situation before... nothing new to me)...I hadn't heard from my preservation specialist in a week or so... I called to find out what was going on, she claims she did not receive anything from me (and didn't bother to call and let me know)...

      Sent the information again... EXCEPT the hardship letter... she miraculously receives it this time with no problem... I repeatedly told her I had hardship letters on file and nothing has really changed (but according to them, the date on the letter needs to be updated).

      Was told when I send in the hardship letter, it would stop the foreclosure.

      My computer had been in the shop which contained the original hardship letter (same one that was sent a dozen times before)... computer tech called, told me computer was ready come pick it up. Did so.. came home to NO HOME (house caught fire).

      House and possessions are now gone.. so now time is ticking have no way to get in touch with preservation specialist.

      Insurance company came out and within a few days cut a check for the property.

      Finally received a letter from the mortgage company... dropped everything and contacted them on the spot to let them know what happened. Asked the representative if they could please connect me with my preservation specialist... they did not know who she ways (after pulling up my file). So they connected me to another specialist whom I've never spoken with. I did leave her a message to please give me a call it was very urgent... She never did...

      I called every single day.. several times a day asking to speak with my original preservation specialist... or anyone who could stop the foreclosure because the house burned (plus I had the check from the insurance company)... Still the rep never budged and would not allow me to speak with the specialist... He told me, (the day of the foreclosure) “Ma'am it looks like the only thing you need is your hardship letter... and the preservation specialist is the only one who can stop the foreclosure, there is nothing I can do for you. But if you can send in that hardship letter before 10:00 AM (the time of the sale) its possible we can get something done.” I asked him to transfer me to the new specialist I was assigned to, but again she NEVER EVER returned my phone call... EVER...

      Now the house has been foreclosed on and I still continued to call... Found out that the house never sold in the auctioned and that I owed $47,000 (that's how far I was behind). I was told this by several representatives.

      Just wanted to insert here, every time and everyday that I called I made sure I started off with “We had a house fire... or the house caught fire...”. To this day according to their reps, they don't know that the house caught... and never knew it did.

      I also receive a letter from the mortgage company stating they have put insurance on the house on my behalf because I didn't have adequate enough insurance to cover the home... (when did that happen!) Now, its mighty funny how they have put insurance in my name on this foreclosed house for the same amount as the insurance check... (wow). Called back to let them know about this... rep stated, “That should have never happened. It must have been a mistake.”

      Okay.. still continued to contact them every day to see what else I could find out... and told them again, the insurance company had issued me a check.. (This check has their name on it, my husbands and myself ) They shuffled and scuffled on the other end and continuously placed me on hold... then connected me with someone in loss prevention... This rep told me to sign the check and send it to them.. I asked them what they were going to do and how this worked... she said, “I don't know what is going to happen and I'm not sure what you owe... but you need to go ahead, endorse the check and send it in. We'll let you know in two weeks time after you send in the check...” (uhm.. no!)

      A few days later we took the check to their bank branch to see if they would endorse it... The bank manger herself called around to find out what was going on... At first she found that I owed $110,000 which was the loan amount... but after further digging.. she found that I owed $47,000... several people gave her that very same number. They then gave her the number to their foreclosure attorney... who called back and confirmed with both me and the bank manger that the payoff amount was $47,000 and she sent in a request to have them put in writing before she could move forward.

      I waited to hear from them for two months and called them every week to find out what the hold up was... Finally received a letter from the attorney's office in December stating the pay off amount was $157,000!

      I spoke with a local rep and she called the office for me and told them she needed a correct amount because clearly this is not right... the rep from the mortgage company was so snotty and rude. We bid her a good day and hung up.

      What do I do? Where do I go from here? Can you help?

    • bethparker profile image
      Author

      bethparker 5 years ago from Grant, MI

      Hi me*o,

      It's unlikely that your new lender will want to finance a home that is $140k underwater. That's a big risk for the mortgage company.

      As for whether you husband can buy a house, the name on the deed doesn't matter. What counts is whose name is on the mortgage. If it's in your name only, then going through foreclosure will not affect his credit, only yours. If both names are on the mortgage, it will affect both of your credit scores.

      Keep in mind that for your husband to qualify for a new mortgage without you, he must have enough income on his own to convince the lender that he can pay the payment.

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      bethparker 5 years ago from Grant, MI

      Molly,

      You have no reason to feel guilty. Your circumstances have changed. If I were you, I would stop paying on the house and start saving that money for moving expenses. Check the laws in your state to get a good idea of how much time you have before you have to move and take advantage of that time to gather together the money you will need to pay for a U-Haul, gas, etc. to get moved to wherever you're going.

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      me*o 5 years ago

      I bought my condo right before the housing market crashed, and am now $140k underwater. My name is the only one on the deed, so can my husband buy a home? We want to sell it (if its even possible, which we doubt)...are we able to roll the remainder of the condo's loan in with a new loan? Or no?

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      MollyG 5 years ago

      I live in Kansas. I purchased a home three years ago when I had a full time (+ overtime) job. I have became disabled and lost my job because of it. I am now on social security disability. I am no longer able to make the 1400.00 house payments. In fact, I am considering moving to another state because I have children there that will be able to help me due to my disability and they keep telling me to "come on". I have always paid my bills but have had to let one of my parents (who moved in with me after I bought the house), and my roommate help to pay monthly bills beyond what they were use to. I have had the house on the market for almost 200,000.00 but it is not selling. I feel guilty walking away but I am at the point that I am just further and further in dept and physically not able to pay anything else since my monthly check has gone to 1/3 of what it use to be when I was working. It will never change as I am now in a wheelchair. I could sure use some words of encouragement and advice. Do I walk away, call them and tell them I am walking? My annual salary is below poverty level now and I have no insurance. I could not ever pay off the difference between what is owed on the house and what the bank would sell it for.

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Hi Marian,

      If you're worried about your parents suing you, I think you have more serious issues than just the money. I hope it all works out, but remember that family relationships are usually more important than financial repercussions. Try to preserve your relationship with your parents whatever the cost.

      Good luck.

      Beth

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      MARIAN 5 years ago

      My parents and I have borrowed against their home for a business. It was their home originally and almost paid off but they wanted to go into business with me but unable to borrow as pensioners. I was added as 1% owner in order to apply for the loan. The business went belly up and my parents are now losing their home. They are stating now that they did not know what they were getting into and that because of me they lost their home. Can they sue me?????? Help.

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      JJ 5 years ago

      I am making my mortgage payment and into debt management our problem is were behind on utilities facing shut off.

      What do we do now when we can't make the payment they want to keep the utilities?

    • bethparker profile image
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      bethparker 5 years ago from Grant, MI

      Mario,

      If you go through foreclosure, it will not affect your wife's credit. However, for her to buy a home using her credit only, she will most likely need enough income to show that she can afford the payment on her own. It would be a good idea to sit down with a mortgage broker and find out how likely it is that she would qualify before you make any decisions about the current home.

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      bethparker 5 years ago from Grant, MI

      Joe,

      If I were in your place, I would try to find another tenant.

      In Illinois, the bank can come after you for the difference if the house sells at auction for less than you owe. However, they can't do that in the case of a consent foreclosure or deed in lieu of foreclosure. Read here for more info: http://www.foreclosure.com/statelaw_IL.html

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      Mario 5 years ago

      Here is my situation. I got married and bought a 2 bed/ 1 bath condo 4 1/2 years ago for $175K in illinois. My intent was to live there for a little while with my wife until we started having a family and got my wife's credit improved. The mortgage and title of the house are in my name only, after the whole realstate bubble popped, my home has lost value dramatically, places like mine are selling for about $43K to $63K, so I cannot refinance to get a lower payment and possibly rent the place while I buy another place, we have one kid now and plan to have more, but need a bigger place. I did 100% financing on the place so I pay a PMI and do not qualify for the HARP program with the debt to value ratio of the home. I'm thinking of letting it go into foreclosure, but I'm not sure if this is the right thing to do. I have a steady job and so does my wife, but it seems a waste to keep paying on a mortgage that is not going to improve anytime soon, it is just a bad deal that I'm chained to. If I let it foreclose, can my wife still buy a house under her name? what will be the ramifications for me if I do? any advise will be greatly appreciated.