I got a call this morning (while standing looking at my leasing agent lady's bosom) and it was from my mother's mortgage collection dept.
Long story short:
A. She is 120 days delinquent.
B. He saw 4 options:
1. She pay all payments to current. (best)
2. Some partial payment to fend him off.
3. She sell house to try to get best price and pay off him.
4. He forecloses and takes whatever quick sell occurs.
My question: :" Anyone know how foreclosure works".
Does the mortgage company toss the occupant?
Do they just advertize it as forclosed for sell?
Is the amount they can sell for governed by any rusles.
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What state is the property in? *Some states have protections for deadbeat homeowners.
Barring that, if they foreclose (whatever the process in that state is), it typically results in a public auction where the lender most often bods a dollar more than the outstanding liens and walks away with the property. *In that case, the former owner gets squat. *The former owner is then removed, by the local sherriff if necessary.
Pay the pymts up to date and then get it on the market yourself if she cant afford it.
How much does she owe vs. how much is it worth?
It's likely going to be a few month process to foreclose. The bank will wANT to foreclose if she has any amount of equity. Otherwise, it's hit or miss. Bottom line though, if they dont get some $$ quick, expect it to happen.
By foreclosing, the house will be sold at a public auction. She liekly has 6 more months or more til that point. There will be a series of papers that need to be filed etc before that point. Her credit will take a huge hit if it goes thru foreclosre, and it likely already HAS if she isnt paying on time.Say she owes the bank 100k, but it sells at auction for 80k. Guess who owes the bank 20k! In that case, though, the bank will probably bid it up to what is owed so they get it.
Where are you located? If you email me offline, I might be able to get you in touch with people who deal with this all the time.
Bottom line: Find out what your mom needs/can afford, and work a solution from there
I've got cash on the barrelhead if you get in dire straights and just want to sell to avoid foreclosure. House conveys sans mother though, right? I've already got enough of those.
From a legal perspective, I'll recount my memories from North Carolina Real Estate Finance class from law school. It sounds like if you don't resolve the debt w/ the mortgage company soon, they'll begin foreclosure w/ the county clerk (Cumberland county I presume, if memory serves). Notice will be served on your mom and all other lienholders. You have a period to protest the foreclosure. Then the public auction date is set and advertised. Sale usually takes place by auction on the courthouse steps/lobby/etc at the time specified in the advertisement. If you cure default prior to the sale (pay what you owe), foreclosure is prevented. The debtor also has rights of redemption for a period after the foreclosure sale (I want to say 12 months, but not sure if the law is settled in that area).
Auction proceeds pay the sales fees, administrative fees, and foreclosing trustee's fees (usually ~5%) first. Then the mortgage company gets their share (debt owed, plus interest, penalties, fees, etc.). After everyone else is paid, the surplus, if any, goes to the debtor (your mom). If there is a deficiency (somebody doesn't get paid 100%), they can seek a deficiency judgment against the debtor.
Free advice, take it for what it's worth. My memory is a little fuzzy now. I've got a few names of Raleigh-based real estate attorneys that I've worked with in the past or know from somewhere. If you are interested.
justin,
thanks for that advice. The situation is much the worse because the institutions such as court, mortgage, and finace all have the lawyers with experience.
Mom, is a deer (dear) in a headlight. Can't be there to help but was not there to create the situation.
I invest in pre-foreclosures in Detroit for my living. If she can't avoid the foreclosure I can try to help her out. Do you know who her lender is? and have they already scheduled a sale date?
We would negotiate with her lender first try and get the sale postponed and second to buy the house at an amount that will settle her debt. Let me know.
Does the mortgage company toss the occupant?
Do they just advertize it as forclosed for sell?
Is the amount they can sell for governed by any rusles.
In the northeast I've seen banks allow the occupants stay in the house. Winters are too harsh to have a building empty (1 person generates the heat of a 100 watt bulb!). But this varys by bank.
Yes, by law the foreclosure is advertised to notify all lean holders.
The bank is motivated to sell at a price above expenses, fees and debt. I am not aware of any "restrictions" places by any laws.
With 70k equity ... best to pay the back payments. Sooner than later as late fees and foreclosure expenses will accumulate quickly. Too many lawyers involved for these things to be cheap.
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