Real Estate Law
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Good morning Shauna, I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today. I think there may be a bit of confusion over what is happening here. The HELOC is foreclosing on your property---not selling the HELOC at auction. When a second mortgage holder forecloses, the fist mortgage must be paid in full before clear title can pass to the buyer. However, title will still pass to the buyer---it will simply be subject to the first mortgage. If someone buys the property at the foreclosure sale, and then pays off the first mortgage, they will take good and complete title to the property. You will no longer be the legal owner, and you can then be evicted---just as you could if it were the first mortgage lender foreclosing. You being caught up with the first mortgage does not protect the property from being foreclosed on by the second lender. It is just that the second lender cannot keep any proceeds of the sale until the first mortgage lender has been paid in full. So, knowing this, if the second lender is foreclosing, they also likely intend to pay the first mortgage as well and then take title to the property and sell it. I wish you the best in 2013. I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so. You may reply back to me using the Reply to Expert link if you have additional questions. Kindly take a moment to rate my service to you based on the understanding of the law I provided. Please understand that I have no control over the how the law impacts your particular situation. Thank you, Doug
Thank you for your help, I just need some clarification.
I cannot file a Chapter 13 to stop this as I won't be approved by a judge due to financial limitations. It is my understanding a Chapter 13 is your regular payment plus extra and paid off in 5 years... I can't do that.
Is there any other way to stop this besides bankruptcy and if not... you say they can evict me... about how long will this take after the sale.
In your experience, how often do you hear of someone buying a 2nd at 60K and then buying the first at 220K on a house that is upside down?
Thank you, shauna
Good morning Shauna, You asked:
I cannot file a Chapter 13 to stop this as I won't be approved by a judge due to financial limitations. It is my understanding a Chapter 13 is your regular payment plus extra and paid off in 5 years...That is a correct statement of the process. I can't do that.
Is there any other way to stop this besides bankruptcy and if not... you say they can evict me... about how long will this take after the sale. No, short of paying the arrears, the lender can be expected to move forward.
In your experience, how often do you hear of someone buying a 2nd at 60K and then buying the first at 220K on a house that is upside down? If the property isn't worth $280,000---never. If the property is worth $300 or more, foreclosure is a good way for the lender to get most, if not all, of their money back.
You may reply back to me again, using the Reply to Expert link, if you have additional questions. I wish you the best in your future, Doug
Let me clarify just a bit, Shauna. If the property value is less than, but reasonably close to $280,000, so that the lender who forecloses can get more money than they think they can ever expect to collect from you---there is an incentive to foreclose, get what they can and write the rest off as a loss.I have seen this occur, but not with any real frequency. Lenders are simply not in the habit of managing property, and buying and selling property is expensive to do.
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Thank you Doug for the clarification, but I am still wondering how long will an eviction take... how long can I expect to stay in the home after the sale before evicted?
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