So when they finally foreclose on your house

[Connonym]

does that wipe the slate clean as far as your debt or do they still come after you for money? I got a letter the other day that a fucking investment company bought my house at the auction (I was really hoping a family would get a good deal so I'm upset about that) and it will be final in the first week of May. I don't know what happens next. I can't afford a lawyer, I definitely can't afford to pay the difference between the mortgage and what it sold for. I hope to GOD I don't have to pay taxes on it if they "forgive" the loan. I'm just really glad to have it finally be over. When I tried to get a lein in lieu of foreclosure they wanted 10 k to agree to it. No way I could afford that either. I'm ready to start fresh, hopefully the world will let me.

[Lil Missy]

1. I'm not sure

When I lost my other house, it was all over with when they forclosed.

But when it happenened to some rentals that my BIL owned, they froze and took his bank account, as well as the savings accounts he had set up for his kids.

He is making 100K a year, so it was a big hit.

[Connonym]

2. oh ack!!

that's scary

[Lil Missy]

6. Now thaty I recall, I also filed bankruptcy, so maybe that's why I didn't have to pay the difference

[Connonym]

3. shameless kick hoping someone in the day crowd has any answers nt

[Raven]

4. I think you are obligated for any shortfall between the mortgage

amount owed and what the house sells for. The bank may forgive that in which case you will be taxed on the amount forgiven.

[NMDemDist2]

8. I think you're correct but that tax issue was supposedly addressed in the

bill they're moving through Congress to help the housing industry

I'm not sure it's in the final bill tho.. :shrug:

[skygazer]

5. I don't know the answer

But man, I'm so sorry. :(

:hug:

[Erva]

7. I don't know the answer either,

but I am sorry this happened to you. I hope it works out well in the end.:hug:

[Shine]

9. I'm sorry. I have no advice, but I wanted to offer my moral support

:hug:
I was reading that in our state, CA, the rate of foreclosures has increased something outrageous, like 340%!

Insane.

Hang in there. I hope it all works out for you.

[Tuesday Afternoon]

10. Sorry to read this...I have no advice or knowledge on the subject

except that the situation totally sucks x( :hug:

[YellowRubberDuckie]

11. I believe that's it.

If they didn't get your total debt out of it, they write it off as a loss. I work in the post foreclosure part of the mortgage industry.
If you have more questions, please feel free to PM me.
Mel

[kaiden]

12. To be safe, file Chapter 7 bankruptcy.

The chapter 7 erases your foreclosure. True, you'll have a bankruptcy on your record, but you won't have a foreclosure (which is worse on your credit report). In two years, you'll be able to buy a house with a FHA mortgage.

[Connonym]

13. Thanks to all of you for your supportive responses

you're all very kind. Thanks.

[Midlodemocrat]

14. Don't have any idea, but here's a hug for you.

:hug:

[PRETZEL]

15. I think it may depend on the state,

when I lost my house, the bank took it over. They took the deed in lieu of the amount that the judgement was against me.

I have no interest in the property anymore, therefore, any taxes due on the property are the responsibility of the owner of record.

The only thing is that I now have this on my credit report. That and a few other things.

[Deep13]

16. You absolutely need legal advice on this.

Generally speaking (not necessarily your case) the debtor still owes for the mortgage deficiency after the auction. I don't know if a forgiven loan is taxable income or not. You might want to consider bankruptcy.

[flvegan]

17. Depends on your state and the laws.

Having 12 years experience in a law firm that handled its share of foreclosure work, I can say that in most cases, that's the end. Normally, in judicial states (like FL and I believe WI), the lender/bank/Plaintiff will bid the amount of the Final Summary Judgment. That FSJ is the default amount of the loan plus fees and costs. The debt is ultimately satisfied. If there is a deficiency, then as part of the action, the Plaintiff can add an additional Count to the Complaint seeking a Deficiency Judgment (money on top of the title to the property). However, if a 3rd party bidder outbids the Plaintiff, then any of that money goes towards secondary lienholders or back to the property owner.

As for what happens next, the court should issue a Certificate of Title or whatever type of conveyance is used in that state. At that point, the buyer owns the property and will go through the eviction process.

What's sad is that the lender wanted $10k to accept a Deed in Lieu. A smart lender should always try the "cash for keys" route first. They're just largely too stupid to understand that.

I'm sorry that this happened to you, and I wish you could get bona fide legal counsel. I'm obviously not a lawyer, just speaking from my unique experience in hopes that it helps.