My house is in a foreclosure auction, what does this do to me?
I purchased a house with an ex, and needless to say things didn’t work out. When I moved out, he convinced me to sign a quit claim deed. I didn’t realize I was giving up all rights to the house without being released from my financial obligations to it. Now the house is in a foreclosure auction. I have no idea what this means for me. My credit was fantastic before all this business began, but now my credit score is plumiting fast! I’ve been told I should file for bankruptcy so that I can have my name removed from the mortgage, but I feel like that would be a bad idea. Is it really my best bet? What effect does this auction have on me? The ex refuses to talk to me at all, so I have no clue what’s going on besides what I can find online regarding the auction.
Try calling whoever is running the auction and explain your situation. They can put you on the right track to find out where you stand.
You can also call the city where your property is located and ask them what they know.
Was your name also on the original mortgage for the home? I assume so from what you wrote. You can also call the lender and ask them what’s going on. (The city or county can tell you who holds the mortgage if you no longer know.)
April 19th, 2010 at 2:12 amThe last thing you would want to do it file bandruptcy. The laws are much tougher than they were 5 or 6 yrs ago. It will still ruin your credit. If the house is in forclosure, the mortgage company or bank will probably try and sell it at an auction. If they do not sell if for enough to pay off the balance you and your wife (if both names are on the deed) would have to pay a deficiency balance. That means that is you owed 100,000 for the house and they only got 75,000 at the auction, you would still be responsible for the 25,000 balance. Filing bankruptcy will still not remove your name from the deed not prevent you from having to pay off the property. But, they should be doing after your wife too, if her name was on the title.
The only way to resolve this would be to talk to the mortgage company and see if the quit claim deed will protect you from having to pay a deficiency balance. Also, there is a possiblity they would work out a deal with you to buy it back. The mortgage company does not want the house. It will be difficult to sell because the economy has produced so many repossessions. What they want is to get as much as they can from their loss and get rid of the property.
It may not be too late to work out something with them, if you could come up with a way to lower the payments so you could afford to make them.
Also, you might want to ask them if by siging the quit claim deed, will that releave you of a deficiency balance. Sometimes, they will do that when you turn it in voluntarily.
Foreclosure simply means they are closing the loan or taking it back and will take your property since you could not keep up the mortgage. But, again, they do not want to foreclose and if there is anyway you can work them, it would be in your best interest.
If you can hold on a few months, you may be able to find someone to purchase it just for what you owe on it. I do not know how long you have had the house, or how much equity you have in it. But, if the sales price is right, you should be able to get a buyer and not have to go into foreclosure. Which is when they will reposess it.
If I were you I would not sign any more legal documents with the mortgage company unless you let an attorney or at least a Realtor look at it.
April 19th, 2010 at 2:12 amA lot depends on the state you live in. In some states, the only thing that will happen is your credit will take a hit.
In other states the lender CAN but probably will not want you to pay any amount they loose on the sale of the house.
April 19th, 2010 at 2:12 amIf you owe $100k on the loan and the home sells for $50k you still owe the bank $50k. They can sue you, put a lien on any property, take posession of property and garnish wages (this may be different in each state). Before it sells go buy another home or rent an apartment, file bankruptcy chapter 7 if you can and forget all about it.
April 19th, 2010 at 2:12 amFrom your narrative, it looks like you are now responsible for the loan and have absolutely no rights on the property since you signed the quit claim deed! (though situation )If a date is already set for the auction there is absolutely nothing you can do about that, the auction would proceed as planned! What you can do however is to put comments on your credit report explaining that the mortgage was jointly owned prior to your divorce; experian usually allows you to put a small narrative on your credit report if you sign up for their credit watch. Also most lender would look at this when underwriting future loans for you especially if you have documents to show that you were divorced before the forclosure occured
April 19th, 2010 at 2:12 amFiling bankrutcy might be counter productive especially with the new bankrutcy laws that require you to repay outstanding debts owed.
If the house is your only delinquency, all the bankruptcy will do is increase your monthly expenses. Not only will you need to maintain your current obligations, once again you could be saddled with the monthly mortgage and and a repayment plan for the defaulted balance.
You don’t need to find this on line. All you need to do is call the mortgage company. You are still on the promissory note and only a payoff or refinance will release this obligation. They will probably refer you to the foreclosure attorney. The balance will be increased because of the processing and filing fees.
If this one nick on your credit got you out of a bad life, it may not be all that bad. Test the water with your toe before jumping in. Good Luck.
April 19th, 2010 at 2:12 amFILE BANKRUPTCY: You have been given bad advice and
now you are in a condition that will only get worse if you do
not file. If filing leaves you at ZERO, that is a better place
to be than with a pile of bills over your head.
Save all your money, you will have to go on an ALL CASH
BASE. The first thing you have to do is buy a property
for back taxes (Often these can be had for 1/20th the
price of the market). Even if the property is half broken
down, buy it. The cost to make it usable is less than renting.
As soon as you can stop renting, you can start building.
Once you have built strong enough to raise the property
value, you are good to go. In 3 to 5 years, you should be
loan free, rent free, and own a property that is equal to
50% of the average property value of your community.
One step at a time, things will get better – LET YOUR EX
April 19th, 2010 at 2:12 amFEND FOR HIMSELF. He is just the average man, most
of us do not know what we are suppose to do.
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