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Can one be held liable for unpaid interest fees and other costs of a leader as well as principal balance due on a recourse loan after a foreclosure on the securing rental property?
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∙ 10y ago
One word answer: Yes
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∙ 10y ago
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If my husband owns a property with his ex-wife and they share the mortgage on the property am I liable for anything if he dies or defaults on the loan?
No. If he dies and defaults on the loan the bank's recourse is to take possession of the property by foreclosure. The bank has no claim against you.
Is Georgia a non recourse debt state?
Yes, Georgia is a non-recourse debt state. This means that in the case of a foreclosure, the lender cannot pursue the borrower for any deficiency balance remaining after the sale of the property.
Is Ohio a recourse state?
Yes, Ohio is a recourse state. This means that lenders in Ohio can pursue borrowers for any deficiency balance remaining after a foreclosure or repossession.
Do you pay income taxes on rental forclosed property?
Possibly. It depends on your basis, how much depreciation you have claimed, whether the loan is recourse or non-recourse, and whether the bank is canceling the unrecovered balance of the loan. A foreclosure is treated as if you sold the property to the bank. On a recourse note, it is treated as if you sold the property for the fair market value at the time of foreclosure. On a non-recourse note, it is treated as if you sold it for the balance of the loan. (I am assuming the loan balance is more than the value of the property, otherwise you would have just sold the property and paid off the loan, right?) On a recourse note, if the bank decides not to pursue a deficiency judgment against you, then the cancelled debt (the difference between the FMV and the balance due) is taxable ordinary income (unless you meet the insolvency or bankruptcy exceptions). You'll also need to recapture depreciation, just like on an ordinary sale. Unlike a homeowner whose personal home is foreclosed upon, you will be able to claim a capital loss.
Does the lender of a second mortgage have any recourse if the payments become late?
Yes, they will report the late payments to the credit bureaus which will damage your credit score, and if enough payments are missed can commence a foreclosure action on the property.
What To Ask A Foreclosure Lawyer?
Millions of Americans in the past several years have experienced foreclosure. Although it is not something anyone plans on, unpreventable life events sometimes make it a gruesome reality. When this problem is faced, money is always tight, so contacting a lawyer may seem like yet another financial burden. There are attorneys who specialize in foreclosure and work for affordable rates. For qualifying individuals, free legal aid is also available for foreclosure issues. When meeting with a foreclosure attorney, the meeting will be short, so it is important to make it count. During the initial meeting, there are some important things to understand and ask about. The most important thing to know is if the state is a recourse or non-recourse state. Non-recourse states are more buyer-friendly, while a recourse state favors the lender more. In a non-recourse state, the buyer will not have to pay excessive amounts beyond the foreclosure proceeding. They may pay nothing or a small fee. In recourse states, the buyer must pay the amount of difference between the foreclosure sale and the loan amount, which is sometimes very high. Before meeting with the foreclosure attorney, be sure to understand the difference between these states to save him or her the time of explaining it. Always ask about redemption rights immediately. In many states, after the initial filing of a foreclosure proceeding, the buyer has the right of redemption. This means they have the right to buy back the house if they pay for it in full. While it may not seem like a possibility, some attorneys may have solutions for this. The right of redemption period is usually 30 days or slightly more, so it is important to know and act quickly. When the right of redemption is missed, the property will go to public sale and be auctioned off. In a recourse state, this could be detrimental to the buyer. For this reason, the attorney will provide several suggestions and solutions. Buyers who have not been paying on their loan for very long and live in a recourse state should be sure to take the attorney's advice. It is also important to know how long the process of foreclosure will take. In some states, especially non-recourse ones, the process may take up to two years to fully complete. However, in other recourse states, the entire process may only last a few months - or less.
Is Colorado a non-recourse state for residential property?
yes
Is Maryland a non-recourse state?
No. The State of Maryland has long-standing foreclosure legislation that allows lenders up to three years to file a deficiency judgment for the balance of loans after the proceeds of a foreclosure sale have been applied. For example, you are foreclosing on a $400,000 mortgage. The bank takes possession of the property. After filing the necessary notices, sells the property in a foreclosure sale or auction for $300,000, the bank may file for judgments against you of up to $100,000. If the court finds a default, then you will owe the money, according to the payment terms set by the court to the lender.
What recourse does a second mortgage holder have when the first mortgage goes into foreclosure?
Hate to tell you, but in my state (WA), if a senior deed of trust or mortgage is foreclosed, then the inferior/junior mortgages and/or deeds of trust are foreclosed as well. That means that you have no recourse subsequent to a foreclosure. I suggest seeing an attorney immediately (see the phone book for one who gives "free consultations").
Are you liable if your spouse has a foreclosure but your name is not on the loan or the final deed when it was signed back to the bank?
The liability in foreclosure comes from the responsibility for the mortgage debt. Regardless of your legal ownership or interest in the home, you do not have liability for the mortgage debt if you are not a party to the loan (did not sign). The home is the collateral for the loan and can be foreclosed and sold as recourse when the loan goes into default. While everyone who has an interest in the home loses their rights to the home when it is foreclosed, the liability for the loan and any negative actions associated with that (collections, lawsuits, negative credit reporting) belong solely to the signers on the loan.
If an attorney fails to file paperwork on behalf of a client to stop a foreclosure can a trustee sale be reversed?
No, that followed legal process...but you may have recourse for damages against the attorney.
If my investment property goes into foreclosure will they put a lien on my home?
If the loan on the investment property is "recourse" -- ie you personally owe whatever the bank fails to collect on a foreclosure sale, and then you do not pay that "deficiency", then the bank could sue you and take a judgment against you and file a judgment lien against you that would tie up the house (a judgment lien effectively puts a "stop" on transfers of any property). And if you try to sell the property after they file suit (or possibly even before), you might be charged with a fraudulent conveyance. It also depends on whether they took your home up front as additional collateral. There are too many unknowns because you gave few facts, but this is as "could be".
