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Posted: 3/27/2006 7:11:11 PM EDT
Quick question:

I have an aunt that is on the verge of having to default on her mortgage. She lost her job and had to take another job that pays far less than what she was making.

It was my understanding that when someone is in this position the bank will foreclose on the house and that is the end of it. However, someone (whom I don't think of as being overly knowledgable) told me that the bank can also garnish your wages to recoup losses. Is this true? Can they foreclose on your house AND garnish your wages?

I thought that Garnishment was only for things like unpaid tax bills and child support.
Link Posted: 3/27/2006 7:18:39 PM EDT
[Last Edit: 3/27/2006 7:50:50 PM EDT by JohnTheTexican]
Unless they're the government, they can't garnish in Texas except for child support. If they sue her and get a judgment, they can get at her non-exempt assets, but Texas is pretty generous in what's exempted, and they can't get her current wages (although they may lose that protection once they're deposited in the bank).

ETA: I'm only talking Texas law. If she's motown_aunt, different rules may apply.

EATA: If they don't get their money out of it when they sell it, they can sue her for the deficiency. But like I said in the original response, just because they can sue her doesn't mean that they can collect.
Link Posted: 3/27/2006 7:20:29 PM EDT
speaking of which, where's ETH ? haven't seen him in a long time.
Link Posted: 3/27/2006 7:23:25 PM EDT
Where is the house and how much does she owe?
Link Posted: 3/27/2006 7:39:22 PM EDT

They can sue yo for the amount left owing after the house is sold at auction.
Link Posted: 3/27/2006 7:50:44 PM EDT

Originally Posted By SC-Texas:
They can sue yo for the amount left owing after the house is sold at auction.



This is true. Also, remember that in terms of mortgages, time is of the essence. Normally, the acceleration clauses are very draconian. This means that one event of default (late payment), may accelerate the entire remaining balance to be paid immediately (check the contract). If she is having problems, get with the mortgage company and try to work a payment plan, but get it in writing.

You are just a number to them, so save your/Aunt's sob stories except to inform them of your request. Do not ignore this problem. There is a whole cottage industry of buzzard type investors just waiting to snatch up distressed properties--they are ruthless.

bd
Link Posted: 3/27/2006 7:54:03 PM EDT
Chapter 13 Bankruptcy an option?
Link Posted: 3/27/2006 7:55:59 PM EDT
I they take the house then they have taken what they are owed. Cannot ask for more than that.
Link Posted: 3/27/2006 8:00:59 PM EDT

Originally Posted By Jame_Retief:
I they take the house then they have taken what they are owed. Cannot ask for more than that.



Depends on how much is owed on it vs what they get for it.

She could just flat out sell it and pay off the bank. The fact that is not seeming to be much of an option leads to me to believe she is currently mortgaged to the hilt on it.
Link Posted: 3/27/2006 8:10:12 PM EDT

Originally Posted By bluduk15:
. There is a whole cottage industry of buzzard type investors just waiting to snatch up distressed properties--they are ruthless.

bd



Buying something from someone who is going to lose it to foreclosure is ruthless how?

Smart people sell before foreclosure.....it helps your credit to keep the foreclosure off your credit report.

Yes, I've bought those houses before, and I will buy more. Me and my partners have one right now that we paid 100,000 for. We will spend about 15,000. Sell the house for $189,000 and have 2 lots left over to build other houses on.
Link Posted: 3/27/2006 8:47:19 PM EDT

Originally Posted By krpind:

Originally Posted By bluduk15:
. There is a whole cottage industry of buzzard type investors just waiting to snatch up distressed properties--they are ruthless.

bd



Buying something from someone who is going to lose it to foreclosure is ruthless how?

Smart people sell before foreclosure.....it helps your credit to keep the foreclosure off your credit report.

Yes, I've bought those houses before, and I will buy more. Me and my partners have one right now that we paid 100,000 for. We will spend about 15,000. Sell the house for $189,000 and have 2 lots left over to build other houses on.



Ruthless in the way they don't give a shit about the distressed circumstances of the sale. This is not a judgment on the activity, but it's a tough business--Capitalism at its best in my view. Most homeowners who are risking foreclosure are in denial, which makes the situation worse. They seem to think that their situation is somehow unique or special and they will get some kind of reprieve. Not likely.

Yes, the bank will take your house. Yes, they will sell it on the steps of the courthouse. Yes, there will be plenty of people there waiting to buy it and, yes, the mortgage company will sue you for the deficiency.

I was trying to give him an insight on the reality of foreclosure. One of the toughest and most expensive lawsuits I've worked involved a foreclosure based on a single default (fraud too, but that's another story).

bd

Link Posted: 3/27/2006 10:06:16 PM EDT

Originally Posted By krpind:
Where is the house and how much does she owe?



The house is in Michigan and she owes a little over $90,000 on it.

The problem is that properties with older houses aren't selling in that area. Some newer homes are selling, but even that is down. I've had a house for sale in Michigan for a year now. I have another friend back in Michigan who listed his house just after New Years. So far he has had 2 showings. My aunt has her house up for sale but it doesn't look too good. There are alot of homes for sale and people don't seem to be buying. Too many layoffs and property taxes are going up.
Link Posted: 3/27/2006 10:10:30 PM EDT

Originally Posted By drjarhead:

Originally Posted By Jame_Retief:
I they take the house then they have taken what they are owed. Cannot ask for more than that.



Depends on how much is owed on it vs what they get for it.

She could just flat out sell it and pay off the bank. The fact that is not seeming to be much of an option leads to me to believe she is currently mortgaged to the hilt on it.



Well, the problem is that people aren't buying houses in Metro Detriot right now. The entire area is basically in a depression. Layoffs, tax hikes and rising unemployment are keeping the housing market in the shitter.
Link Posted: 3/27/2006 10:20:17 PM EDT

Originally Posted By motown_steve

Well, the problem is that people aren't buying houses in Metro Detriot right now.




lol your screwed GMs just gonna blow the bottom right out
Link Posted: 3/28/2006 12:43:36 AM EDT

Originally Posted By motown_steve:

Originally Posted By krpind:
Where is the house and how much does she owe?



The house is in Michigan and she owes a little over $90,000 on it.

The problem is that properties with older houses aren't selling in that area. Some newer homes are selling, but even that is down. I've had a house for sale in Michigan for a year now. I have another friend back in Michigan who listed his house just after New Years. So far he has had 2 showings. My aunt has her house up for sale but it doesn't look too good. There are alot of homes for sale and people don't seem to be buying. Too many layoffs and property taxes are going up.



What would a reverse mortgage do?
Link Posted: 3/28/2006 6:48:33 AM EDT

Originally Posted By motown_steve:

Originally Posted By krpind:
Where is the house and how much does she owe?



The house is in Michigan and she owes a little over $90,000 on it.

The problem is that properties with older houses aren't selling in that area. Some newer homes are selling, but even that is down. I've had a house for sale in Michigan for a year now. I have another friend back in Michigan who listed his house just after New Years. So far he has had 2 showings. My aunt has her house up for sale but it doesn't look too good. There are alot of homes for sale and people don't seem to be buying. Too many layoffs and property taxes are going up.



Too far away for me to help.

Sell it for less than she owes if she has to and take out a note on the balance.<----worse case.
Link Posted: 3/28/2006 6:55:01 AM EDT

Originally Posted By bluduk15:

Ruthless in the way they don't give a shit about the distressed circumstances of the sale. This is not a judgment on the activity, but it's a tough business--Capitalism at its best in my view. Most homeowners who are risking foreclosure are in denial, which makes the situation worse. They seem to think that their situation is somehow unique or special and they will get some kind of reprieve. Not likely.


I don't believe it is ruthless. I never get emotional about business......maybe that is what you are considering ruthlessness. Not the same.


Yes, the bank will take your house. Yes, they will sell it on the steps of the courthouse. Yes, there will be plenty of people there waiting to buy it and, yes, the mortgage company will sue you for the deficiency.

Again, people who buy "distressed property" are ruthless when the other option is this?


I was trying to give him an insight on the reality of foreclosure. One of the toughest and most expensive lawsuits I've worked involved a foreclosure based on a single default (fraud too, but that's another story).

bd



If a "ruthless" buyer takes it off his hands he doesn't get sued.

It is not a ruthless business.....it is just business.
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