Home Foreclosure Question for Real Estate Lawyers?

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If I own two houses and have to default on my loan and foreclose on one of them, does that affect my other house? Could they take it? Would I owe the bank money, or would they just take the house I defaulted on?

The reason I ask is that we want to sell one of our homes, but the real estate agent said even if we sold at market value we’d have to PAY $ 8,000 to sell it. I’ve paid my mortgage on time EVERY month for three years, have remodeled the house, installed a solar power system… But what if the sh*&t hits the fan and we can’t pay our mortgage a year from now???

Can I just move into my other home (a run down trailer on a 10 acres) or would my one foreclosure affect the other? This is a separate mortgage with a different bank.

Thanks!!!

Let me start by saying that the closing a sale or buying is a scam by the mortgage groups, realtors, and lawyers…
I had pircked a lawyer recommended by my real estate agent and agreed on $ 600. This was a condo sale, which was difficult to move in this market. Things happened very quickly, with the lawyer needing a waiver from the condo association regarding a 1st right of refusal on the sale, as it was an FHA loan. This was a pain, but we got it. The friday, 3 days before closing, I get a call from my lawyer that I need the association to change the condo bylaws to strike the 1st right of refusal PERMANENTLY. He said at some major additional cost we can get the process started…yea…
The point is if this lawyer had told me that we had to do this from day one, I would not have agrred to move forward with the FHA buyer. Now he wants to be paid. I told him that he should review what he did and what he should have known from the start and then give me a new number to pay him. He did not budge. I am considering sending him $ 200 and telling him he is lucky he is getting this for his knowledge of FHA loans.
Should I pay? am I really liable? Should he have known that upfront? by the way, when I found out that friday and googled the waiver issue….right away I knew it was a problems. I got a real estate broker, lawyer to handle things……..

4 Comments
  1. Reply
    chatsplas
    January 31, 2011 at 1:13 am

    KEEP reading the news and find out about the programs pushed by the Obama team on mortgage modifications.
    Foreclosure on one property can impact another property. Foreclosure on your home should not result in deficiency judgment under new protections.
    Any foreclosure has tremendous impact on your credit rating.

  2. Reply
    Ed Atun
    January 31, 2011 at 1:59 am

    On your personal residence, most states let the lender take the house; and nothing more.
    On rental houses, you are not protected. In theory: The bank will take possession of the house. They will re-sell it. The “loss” will be the difference between the loan and the sale price. YOu owe that money. They have the right to come after you for it. They can go to court and get a court judgement for it. Your credit score will drop under 600.
    But in real life, the banks have not been going after you for the “loss”. Because you usually don’t have any money. If you had money you would have kept the house. But they have the right to go after you and some banks probably will..

  3. Reply
    zeuz
    January 31, 2011 at 2:55 am

    I wouldn’t pay a dime. I’d warn him that if he pursues it any farther that you will file a complaint with the state license bar for malpractice.

  4. Reply
    Expert Realtor
    January 31, 2011 at 3:22 am

    First of all, the attorney has NO LEGAL AUTHORITY to require the association to strike ANYTHING from the bylaws for ONE homeowner, in fact, the HOA would have told him to go fly a kite.

    So, my advice is to contact the bar association to file a complaint, because that IS A SCAM.

    FHA has NO SUCH requirement.

    Bylaws CANNOT be legally changed without the signature of the MAJORITY of the tenants and then need to be filed with the city and recorded….they are also under no obligation to do so…because they have a legal right to have that clause, and if a buyer cannot meet that requirement, then they can purchase other property.

    Think about how ridiculous such a change request is…and a change request that I can guarantee never went through.

    A real estate broker isn’t qualified to “Handle” a bylaw issue either.

    So yes, you are being scammed, yes, you need to file complaints with the state.

    Once he gets the letter from the bar association, your bill will go away.

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