I was told that if we had our home foreclosed on that we would not have to pay the deficiency balance. Got a letter just today demanding payment of a "settlement" of $62,000+! We don't have any money and are barely getting by. What are our options at this time?
If you face foreclosure the mortgage company can claim the deficiency judgment. Do you have any written agreement to prove that they will not come after you for the deficiency balance?
You should try to pay it. Otherwise they can place lien on your other properties. _________________ Good is the Enemy of Great.
Posted: Sat Jul 12, 2008 11:01 am Post subject: Deficiency Balance
Maybe it's the difference used in terminology between states...Is this foreclosure due to a mortgage/home loan?
As Niicss suggests payment will solve the problem BUT that's often more than difficult.
Have you talked to the lender?
Have you considered other solutions?
Are they open to negotiation?
Is there time for a sale of the property?
Is your lender open to other solutions that wouldn't damage your credit as much as a foreclosure (loan modification, deed in lieu)
What is the reason for the deficiency...unemployment, interest adjustment, illness...?
HUD provides a list of non-profit housing counselors. Request the list by calling 1-800-569-4287 or on the web at http://www.hud.gov/local/index.cfm
You might also want to read this article "http://www.americanchronicle.com/articles/67875"
Sorry, there is no free lunch. Check that; unless you're in a "walk away" state like California. Not sure when the American psyche made a 180 to think it's OK to buy something and not pay for it.
There is a "low cost" lunch – bankruptcy -- but it comes with a lot of baggage. On the other hand, in addition to having the deficiency judgment attached to other property, your wages could be garnisheed.
Although you are already through the intermediary process (i.e, you're a bit late for HUD counceling) and the article doesn't apply, you may take solace in the “above the fold” story in today's NYT. Although no one has accused Tan-Jell-O of being a public relations poster child (except when courting Democrat legislators) but he speaks the Truth.
Posted: Sun Jul 13, 2008 11:34 pm Post subject: RE: deficiency payment after foreclosure
Hi rljinvestors,
What's important is in which state you live in and whether your mortgage has been taken out to purchase the house. If your loan is a purchase mortgage and yours is an anti-deficiency state, only then you may not have to pay the deficiency.
Michigan is a deficiency judgment state. By the way, are you in foreclosure? feel free to share your situation with us, so that we can help you find a way out of foreclosure.
Is NC a walk-away/no deficiency state? Thanks. _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
rljinvestors
