Credit Mechanics » Foreclosure http://www.creditmechanics.com Helping Save & Build Credit Sun, 05 Apr 2009 12:47:43 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 What are some of the processes of foreclosure? http://www.creditmechanics.com/foreclosure/what-are-some-of-the-processes-of-foreclosure http://www.creditmechanics.com/foreclosure/what-are-some-of-the-processes-of-foreclosure#comments Fri, 27 Mar 2009 18:49:28 +0000 admin http://www.creditmechanics.com/foreclosure/what-are-some-of-the-processes-of-foreclosure
dustin h asked:


What are some of the repercutions of a foreclosure? Will I be able to rent a place if my house is foreclosed on? Will I be asked to pay the remaining balance on the loan of my house?

Credit Mechanics
]]> http://www.creditmechanics.com/foreclosure/what-are-some-of-the-processes-of-foreclosure/feed 0 What does foreclosure mean for my taxes? http://www.creditmechanics.com/foreclosure/what-does-foreclosure-mean-for-my-taxes http://www.creditmechanics.com/foreclosure/what-does-foreclosure-mean-for-my-taxes#comments Mon, 17 Nov 2008 16:04:49 +0000 admin http://www.creditmechanics.com/foreclosure/what-does-foreclosure-mean-for-my-taxes A property that I am a co-signer on is going into foreclosure. In a question I asked previously regarding this matter, someone pointed out that I will be sent a 1099-c form. What exactly does this mean? If the house is sold at auction will I owe taxes on the amount the house sells for or the amount that was owed or, if the house does not sell for enough, will I owe taxes on the amount not paid?

If we can sell the house before the foreclosure is complete, how does that impact the situation? I'm so confused.

And please, no posts about your tax or loan company. I will report it as abuse.

I know most of the answer.

If the property is a personal residence and sells for more than the mortgage amount, but less than a gain of $250k for a single filer ($500k for a married filer), then there are no tax implications- assuming certain rules under the IRC are met.

If the personal property sells for less than the outstanding mortgage amount plus interest, costs, and fees, then it depends on what the lender does. If the lender gets a deficiency judgement and goes after the borrower for the rest, then again, there should be no tax implications- yet. If the lender writes off the deficiency, this write off is taxable income to someone. If the primary borrower does not pay it, then it is possible that the IRS could come after you (this is the one part of my answer about which I am not 100% certain).

If the property is classified as business or trade property, then there WILL be a taxable gain or loss on the property that someone has to claim. Again, the IRS will make sure that someone pays.

]]> http://www.creditmechanics.com/foreclosure/what-does-foreclosure-mean-for-my-taxes/feed 3 How bad is a foreclosure on your credit and how can I best avoid it? http://www.creditmechanics.com/foreclosure/how-bad-is-a-foreclosure-on-your-credit-and-how-can-i-best-avoid-it http://www.creditmechanics.com/foreclosure/how-bad-is-a-foreclosure-on-your-credit-and-how-can-i-best-avoid-it#comments Mon, 17 Nov 2008 16:04:48 +0000 admin http://www.creditmechanics.com/foreclosure/how-bad-is-a-foreclosure-on-your-credit-and-how-can-i-best-avoid-it I am not in foreclosure yet, but I recently lost my position and we have very little savings so I don't know that I will be able to save my house. We just got into our home in July and then my company lost a major account and I was out of work. I am doing sales now, but that is commission based and slow to pay. I have no equity in my home per se, and i live in California. I guess I'm wondering with the market the way it is, it might be better to walk away and try again in a few years.

Sell …it's the only chance you have….otherwise your credit would be destroyed for a long time….you wouldn't be able to even rent in a good place…..you would end up in a crimeridden roach infested motel somewhere.

Good luck.

]]> http://www.creditmechanics.com/foreclosure/how-bad-is-a-foreclosure-on-your-credit-and-how-can-i-best-avoid-it/feed 4 What happens to other leins when foreclosure occurs? http://www.creditmechanics.com/foreclosure/what-happens-to-other-leins-when-foreclosure-occurs http://www.creditmechanics.com/foreclosure/what-happens-to-other-leins-when-foreclosure-occurs#comments Mon, 17 Nov 2008 16:04:47 +0000 admin http://www.creditmechanics.com/foreclosure/what-happens-to-other-leins-when-foreclosure-occurs My house in California is currently in foreclosure. I have a 1st and a 2nd mortgage as well as a 3rd, seller note. What happens at the foreclosure auction? What happens if there isn't enough funds to pay off the leins? What if any steps should I take?

when the first note forecloses on the property all other liens/notes that came after which are called junior compared to the first note called the senior, are wipe out

depending on the second note, if it was recourse they can come after you, also the third can come after you as well

]]> http://www.creditmechanics.com/foreclosure/what-happens-to-other-leins-when-foreclosure-occurs/feed 5 Does having a foreclosure and not paying your property taxes affect US citizenship application? http://www.creditmechanics.com/foreclosure/does-having-a-foreclosure-and-not-paying-your-property-taxes-affect-us-citizenship-application http://www.creditmechanics.com/foreclosure/does-having-a-foreclosure-and-not-paying-your-property-taxes-affect-us-citizenship-application#comments Mon, 17 Nov 2008 16:04:46 +0000 admin http://www.creditmechanics.com/foreclosure/does-having-a-foreclosure-and-not-paying-your-property-taxes-affect-us-citizenship-application I have not been able to pay my house for the past six months, it went into foreclosure and know I got to pay Property Taxes but I dont have the money either. Could all of this affexct my ability to get my citizenship.

One thing that immigration looks into is
that once the process is started you wont
be a burden in society or ask for food
stamps, they want to know that theyre
giving citizenship to hardworking people
File your taxes on time and you shouldnt
have that much of a problem. Now your
credit is another thing, once youre a
citizen then you have to worry about
the foreclosure and your payments that
really doesnt help you, I dont know what
state your from but here in texas you
miss 2 payments and youre outta there
so youre lucky you got 6 months.

]]> http://www.creditmechanics.com/foreclosure/does-having-a-foreclosure-and-not-paying-your-property-taxes-affect-us-citizenship-application/feed 2 How does one get an apartment after a foreclosure? http://www.creditmechanics.com/foreclosure/how-does-one-get-an-apartment-after-a-foreclosure http://www.creditmechanics.com/foreclosure/how-does-one-get-an-apartment-after-a-foreclosure#comments Mon, 17 Nov 2008 16:04:46 +0000 admin http://www.creditmechanics.com/foreclosure/how-does-one-get-an-apartment-after-a-foreclosure My friend is letting her house go to foreclosure & will need to rent an apartment. She is currently only 30 days delinquent. How do apartment management companies view foreclosures? Should she apply for an apartment now, knowing that she will not move in for a couple of months?

*** Please note that I am not looking for advice on how to keep the home or to get her out of the foreclosure. All options have been considered. Please give advice on how to proceed to obtaining her next housing. Thanks!

A co-worker of mine had to go through foreclosure and had the hardest time finding a place that would rent to him. I would try to find an apartment as soon as possible before the foreclosure shows up. Many places will not rent to people with foreclosures, bankruptcies or repos. Others will rent to your friend but will want twice the amount in rent as a deposit. It is hard to find those property owners that understand when they have other applicants with better credit reports.

That is why, If I were your friend, I would start looking now, why wait until she is being evicted and desperate to find a place.

Good Luck to your friend. I hope it all works out for her.

]]> http://www.creditmechanics.com/foreclosure/how-does-one-get-an-apartment-after-a-foreclosure/feed 4 What is the current national foreclosure rate? http://www.creditmechanics.com/foreclosure/what-is-the-current-national-foreclosure-rate http://www.creditmechanics.com/foreclosure/what-is-the-current-national-foreclosure-rate#comments Mon, 17 Nov 2008 16:04:45 +0000 admin http://www.creditmechanics.com/foreclosure/what-is-the-current-national-foreclosure-rate I keep seeing in the news that foreclosure's are up XX% in the last year. What they never say is what the foreclosure rate actually is. I mean if it's up to 4% from 3%, that's a dramatic 33% increase, but it also means that there are still 96% of people still paying their mortgages.

I just want to know what the real number is.

The article I read today said that 1 in 538 mortgages are in the foreclosure process…

So, 0.2% or so. This is an almost 100% increase from last year. Some regional markets are disasters with up to 5% of houses in foreclosure (Stockton, CA is one example).

The news makes it sound a lot more scary, no?

good luck!

]]> http://www.creditmechanics.com/foreclosure/what-is-the-current-national-foreclosure-rate/feed 5 Did the final version of Foreclosure Act include the $7000 credit for the purchase of a foreclosed home? http://www.creditmechanics.com/foreclosure/did-the-final-version-of-foreclosure-act-include-the-7000-credit-for-the-purchase-of-a-foreclosed-home http://www.creditmechanics.com/foreclosure/did-the-final-version-of-foreclosure-act-include-the-7000-credit-for-the-purchase-of-a-foreclosed-home#comments Mon, 17 Nov 2008 16:04:44 +0000 admin http://www.creditmechanics.com/foreclosure/did-the-final-version-of-foreclosure-act-include-the-7000-credit-for-the-purchase-of-a-foreclosed-home I purchased a foreclosure in June 2008. I know the Foreclosure Prevention Act underwent many revisions. Does anyone know if the final version which the President is expected to sign still includes the provision for the $7000 tax credit for the purchase of owner occupied foreclosed homes? I am not a first time homebuyer.

I had the same question as I also bought a foreclosure this year. I think this morphed into the $7500 credit for all first time home buyers (not a homeowner within 3 years). However, it has to be paid back to the gov't with 15 yrs, ie, $500/yr.

This is the forum where I got the info.
http://forum.dvdtalk.com/showpost.php?p=8836174&postcount=47

]]> http://www.creditmechanics.com/foreclosure/did-the-final-version-of-foreclosure-act-include-the-7000-credit-for-the-purchase-of-a-foreclosed-home/feed 0 How does foreclosure affect my credit if a divorce follows? http://www.creditmechanics.com/foreclosure/how-does-foreclosure-affect-my-credit-if-a-divorce-follows http://www.creditmechanics.com/foreclosure/how-does-foreclosure-affect-my-credit-if-a-divorce-follows#comments Mon, 17 Nov 2008 16:04:44 +0000 admin http://www.creditmechanics.com/foreclosure/how-does-foreclosure-affect-my-credit-if-a-divorce-follows My husband and I are looking at a possible forclosure. He wants to give the house up. I want to keep it. We have enough money to make payments now, but he wont agree to pay the mortgage company. Our relationship is already on very shakey ground and in danger of collapse. My concern is if we split, how will a foreclosure affect my ability to find a place to live, get a job, buy a car, or just get credit? He is the one with the income, I have been a stay-at-home mom for 22 years.

WOW, are you in a pickle !!! Now, I am assuming you and your husband are both on the note and you are in a community property state and have co-mingled your funds without a prenuptial agreement. As most of us have done !!!

In short, you and your husband are equally liable for any and all debts and are entitled to half of any and all assets. (1) Call a Reputable Broker/Agent ask for a CMA or a Comparable Market Analysis. Most do this for FREE (hoping you list with them) (2) call your bank request a "30 day pay-off" and ask them to mail you a "hardship package" , (a knowledgeable agent can do this for you, but you can do it yourself). You really need to know these details and how much if any equity you have in the house before you can make a good decision !!

NEGOTIATE with your bank/lender BEFORE its too LATE!

In addition, you may want to do what it takes to STOP the foreclosure !! Contact a Bankruptcy attorney, and maybe even a divorce/family attorney for a confidential consultation —-your husband may be in shock when he finds out that he MAY be "OBLIGATED" to pay you child support and/or alimony maybe even equal to or MORE than the current house payment, for a certain period of time to allow you to get a job or learn a trade or other means of producing your own income.
- Time is of the essence – Now is the time to muster ALL your strength and take a stand -

]]> http://www.creditmechanics.com/foreclosure/how-does-foreclosure-affect-my-credit-if-a-divorce-follows/feed 4 How does shorting on a foreclosure work? http://www.creditmechanics.com/foreclosure/how-does-shorting-on-a-foreclosure-work http://www.creditmechanics.com/foreclosure/how-does-shorting-on-a-foreclosure-work#comments Mon, 17 Nov 2008 16:04:43 +0000 admin http://www.creditmechanics.com/foreclosure/how-does-shorting-on-a-foreclosure-work Can you explain the process of shorting on a foreclosure? How do the negotiations work with the lien holders? What would be a normal offer for a foreclosure property (as a percent of retail value)? Thanks, first best answer gets my ten points.

First I do not know whether you are looking to sell or buy.

I have assisted with many short sales. From the buyers perspective you must asses the value and make an offer to the lending institution prior to the process of foreclosure.

You need to know that the home-owner is struggling before they go into foreclosure.

You then negotiate the price with the lender and the seller. getting the lender to take less than the seller owes.

Most generally this is only accomplished if the seller owes more than the property is worth.

You will need cash or a verified line of credit as the lender will not likely loan on the same property again.

I have linked to an article below that is pretty complete.

Single family is harder as it is a smaller portion of the total assets of the lender. Large multi-family and commercial is easier because the lender is out so much money and they are restricted in how much they can loan based on the amount of bad loans they have. Federal law restricts lending institutions from lending more than a certain percentage of good assets.

Often in larger acquisitions you can expect to purchase for as much as 20% less than owed.

Occasionally more depending on the properties condition and other facts.

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