Texas Anti-deficiency laws and a 80/20 mortgage?

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Icon Mini Profile jekylls_guest





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Post Posted: Mon May 04, 2009 4:51 pm    Post subject: Texas Anti-deficiency laws and a 80/20 mortgage?
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I live in Texas and my house has become a crippling financial mess. it's completely falling apart and we don't have the money to fix it.

We're losing about $200/month living here. we're feeling beaten down and disheartened. We've completely gone through our savings trying to stay afloat. We've never missed a payment, but we're seriously considering this drastic step.

We've contacted our lender to attempt to rework our mortgage, but the general feedback so far is that because we've kept up on our payments and aren't in default, we're not going to get help before everyone else who's already in default.

1) How does one "walk away" from a house and what are some of the ramifications?

2) I have read that Texas is an Anti-Deficiency state, but how will that work with our 80/20 mortgage? Both loans were taken out at the same time to get the house (obviously), and are held by the same company.

3) As far as establishing fair market value and avoiding any potential deficiency balance, can we use our property Tax assessed value as evidence of worth?


Any help and info would be much appreciated, thanks!
Icon Mini Profile Niicss
Niicss




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Post Posted: Tue May 05, 2009 12:59 am    Post subject:
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Hi jekylls

In my opinion, walking out of the property will not help your cause. The lender will foreclose your property and it will ruin your credit score by 250 points. Moreover, this negative item will remain on your credit report for next 7 years.

Under anti-deficiency laws in Texas, if the mortgage is a purchase money mortgage (i.e. used for purchasing the property), then the borrower will not be held responsible for any deficiency. In such a case, your lender will only be able to recover the property. You will not be liable to pay the deficient amount resulting from the sale of the property. However, you will not get the benefit of the anti-deficiency laws in case of a second mortgage.

You will have to appraise the property with the help of a property appraiser and get to know the real worth of the property.

Thanks.
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Post Posted: Tue May 05, 2009 8:36 am    Post subject:
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----Under anti-deficiency laws in Texas, if the mortgage is a purchase money mortgage (i.e. used for purchasing the property), then the borrower will not be held responsible for any deficiency. In such a case, your lender will only be able to recover the property. You will not be liable to pay the deficient amount resulting from the sale of the property. However, you will not get the benefit of the anti-deficiency laws in case of a second mortgage.-----

So...are you saying my 80/20 IS covered, or ISN'T?

This wasn't very clear to me.

----You will have to appraise the property with the help of a property appraiser and get to know the real worth of the property. ----

So the tax assessed value is worthless?
Icon Mini Profile adonis
adonis




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Post Posted: Wed May 06, 2009 12:05 am    Post subject:
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Hi Guest,

As it is a purchase money mortgage, you'll be able to get the benefit of the anti-deficiency laws. It is not that the tax assessed value is worthless but you should note that the lender will want you to appraise the property with the help of a property appraiser. He will consider the property value given by the property appraiser.

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