Losing my home (Cadillac: equity loans, attorney, new house)

darstar · 01-30-2009, 10:00 AM

Quote:

Originally Posted by Coldjensens

Whether they can garnish your wages depends on the terms of your loan, where you live and how the foreclosure is done.

What you heard about is not applicable in Michigan. In some states, loans for the purchase of a home are "non-recourse" loans. That means the security (the home) is all that they can go after. They cannot get a deficiency judgment agasint you personally. In some states, it depends on how they forclose. If they do a non-judicial foreclosure (without going to court), they cannto get a deficiency judgement. If they go throgh a judicial foreclosure, then they can get a deficiency judgment. Your loan agremeent will also usually state whether the loan is a full recourse or non-recourse loan (it may use different temrinology.)

In Michigan, they can do a non-judicial foreclosure (Sheriff sale) and then sue you for the deficiency. They can also do a judicial foreclosure and get a deficiency judgmenet against you in the final judgment. If they do a non-judicial foreclosure, then they cannot garnish your wages until after the house is sold and they sue you for any deficiency.

Sometimes, a bank will accept a deed in lieu of foreclosure. If you offer to sign the house over to them and move out by a set date, they will accept the house as full payment. They will do this, becuase the foreclosure process is long and costly. Meanwhile you get to live in the house without paying anything. If you will just give them the house and leave without any trouble on their part, some banks will let the balance go. This may depend on your ability to pay the deficiency.

If you do a deed in lieu of foreclosure, you will probably have to pay taxes on whever amount of the loan goes upaid. There is a temporary relief from this tax, but my understanding is that it only applied to forclosures. I am not sure when it expires.

Finally, you should not take anyhting that you find on these boards as legal advice. You really should talk to a real estate lawyer who has reviewed your loan agreement. You might be able to find answers by calling the state office for foreclosure relief (not sure exactly what it is called). Be careful about these people who advertise that they can get you out of your loan. Many of them are scams.

I wonder where second and third leans come in to play ? A lot of folks out there , all across the country , took out , " equity loans" , or "home improvement loans ". My guess is most of them did so , ... to pay on a very loaded credit card debt. Then , just ran up the cards again , over and over , until there was no equity left.... They turned a unsecured debt , into a secured one. What a mess this Country is in !

Driller1 · 01-30-2009, 10:27 AM

Quote:

Originally Posted by darstar

I wonder where second and third leans come in to play ? A lot of folks out there , all across the country , took out , " equity loans" , or "home improvement loans ". My guess is most of them did so , ... to pay on a very loaded credit card debt. Then , just ran up the cards again , over and over , until there was no equity left.... They turned a unsecured debt , into a secured one. What a mess this Country is in !

I asked my attorney about construction liens. He said the property can NOT be transfered.

darstar · 01-30-2009, 10:55 AM

Quote:

Originally Posted by Driller1

I asked my attorney about construction liens. He said the property can NOT be transfered.

What do you mean " Construction loans ?" Don't get your point ?

Driller1 · 01-30-2009, 11:09 AM

Quote:

Originally Posted by darstar

What do you mean " Construction loans ?" Don't get your point ?

"LIENS". If I drill a well for you, and you do not pay me, I can (and will) put a contractor's lien on your property.

darstar · 01-30-2009, 11:26 AM

Quote:

Originally Posted by Driller1

"LIENS". If I drill a well for you, and you do not pay me, I can (and will) put a contractor's lien on your property.

And , what do you get out of that ? When the bank has foreclosed , and there are already 2 or three second mortgages ?...... Remember , we are talking about homes that have a market value that is less than what is owed the first mortgage holder...... would seam to me that you would be far down the list , to ever receive payment. Especially , when , you don't even know who owns the property , once the " owner" has went South....

Driller1 · 01-30-2009, 12:18 PM

Quote:

Originally Posted by darstar

And , what do you get out of that ? When the bank has foreclosed , and there are already 2 or three second mortgages ?...... Remember , we are talking about homes that have a market value that is less than what is owed the first mortgage holder...... would seam to me that you would be far down the list , to ever receive payment. Especially , when , you don't even know who owns the property , once the " owner" has went South....

OK, that was just what a contractor's lien is. It does not matter how far down you are. The property does not sell with a lien on it. All this time I would get interest. I do not have any on at this time but, I have made more on interest than the well.

darstar · 01-30-2009, 12:39 PM

The question of " liens " comes up , along with equity loans , on property that has been foreclosed on.
Could it be , that is why so many of these upside down deals , are just sitting deteriorating ? I guess if there is an auction , or sheriff sale , that before the winner can take title , he has to pay off the lien and loans. Bidding on such properties , could be a can of worms.........

Driller1 · 01-30-2009, 12:43 PM

Quote:

Originally Posted by darstar

The question of " liens " comes up , along with equity loans , on property that has been foreclosed on.
Could it be , that is why so many of these upside down deals , are just sitting deteriorating ? I guess if there is an auction , or sheriff sale , that before the winner can take title , he has to pay off the lien and loans. Bidding on such properties , could be a can of worms.........

Yep, but, it is public information.

jsejcm · 01-30-2009, 02:15 PM

In our situation we have an equity loan and when we called them to tell them we were going to be shortselling the property would they take 5k of the 11k that we owed them and call the loan settled, they jumped at the deal. We were kinda surprised and then we found out if the property goes into forclosure then the subsequent liens against the property get little or nothing. So they were very happy to recieve half of what we owed them.

As for buying a forclosed property the only thing you have to pay to take the title is the agreed purchase price and any back taxes due.

darstar · 01-30-2009, 02:31 PM

Quote:

Originally Posted by jsejcm

In our situation we have an equity loan and when we called them to tell them we were going to be shortselling the property would they take 5k of the 11k that we owed them and call the loan settled, they jumped at the deal. We were kinda surprised and then we found out if the property goes into forclosure then the subsequent liens against the property get little or nothing. So they were very happy to recieve half of what we owed them.

As for buying a forclosed property the only thing you have to pay to take the title is the agreed purchase price and any back taxes due.

From what you said here.... I can see why most people let the home go into foreclosure . Sort of a " home Bankruptcy ". Then , a relative buys the foreclosed home , which wipes out your liens...... You move back in....