Home in forclosure, Damaged by mortgage company, value may exceed what's owed now.

Hifonic5

LoanSafe Member
Hello I will try keep this short as I can.

My mothers house went into foreclosure in 2018 with a balance of 181k, we tried to sell for 200k and then found out there was a HUD mortgage for 26k which would have meant money out of her pocket that at the time she didn't have so she let the property go.

The house was set to be auctioned off in march of 2019 but it got canceled due to covid and that was he last we heard of it, Chase decided they would not go after her for the remaining balance after the auction, I'm not sure about HUD.

So my moms lawyer told her it s done and it would sell at some point, turns out chase sold the mortgage to Carrington mortgage and the balance has gotten larger and her credit as went down even further because the foreclosure is not done. Balance is now 221k plus the HUD but I'm not sure of the status of that loan.

I was told today by the mortgage company we can sell the house if we want, short sale or try do deed in lieu of mortgage. He said her "pretty sure" they will honor what chase had said about not coming after her for the difference after auction.

The dept they sent me to was trying to help us keep the house not sell it.

Right now the zillow estimate is 321k, the relator who had the listing when we tried to sell it in 2018 said as she remembers it, is 250-300k even with the work it needed. She wants to take another look at the place. The values near us are all over the place with crazy high numbers.

The "preservation team" hired by the mortgage company has done some damage to the property and I've been told a few different ways of going about this, Let it go to auction and hope they don't come after her, sue her lawyer or not informing her of all the changes and what was happening since all the paperwork went to him ( i called him today and he said he has no knowledge of any of it yet clerks documents say he was served)
Sue the mortgage company for the damages and try fix up and sell the house or try a short sale.

Any advice is much appreciated. We are concerned that the house we now own together which is owned free and clear is at risk if any company comes after us as we do not have any money to pay them and dont wish to pay them anything.
 

Jzone

LoanSafe Member
Hello I will try keep this short as I can.

My mothers house went into foreclosure in 2018 with a balance of 181k, we tried to sell for 200k and then found out there was a HUD mortgage for 26k which would have meant money out of her pocket that at the time she didn't have so she let the property go.

The house was set to be auctioned off in march of 2019 but it got canceled due to covid and that was he last we heard of it, Chase decided they would not go after her for the remaining balance after the auction, I'm not sure about HUD.

So my moms lawyer told her it s done and it would sell at some point, turns out chase sold the mortgage to Carrington mortgage and the balance has gotten larger and her credit as went down even further because the foreclosure is not done. Balance is now 221k plus the HUD but I'm not sure of the status of that loan.

I was told today by the mortgage company we can sell the house if we want, short sale or try do deed in lieu of mortgage. He said her "pretty sure" they will honor what chase had said about not coming after her for the difference after auction.

The dept they sent me to was trying to help us keep the house not sell it.

Right now the zillow estimate is 321k, the relator who had the listing when we tried to sell it in 2018 said as she remembers it, is 250-300k even with the work it needed. She wants to take another look at the place. The values near us are all over the place with crazy high numbers.

The "preservation team" hired by the mortgage company has done some damage to the property and I've been told a few different ways of going about this, Let it go to auction and hope they don't come after her, sue her lawyer or not informing her of all the changes and what was happening since all the paperwork went to him ( i called him today and he said he has no knowledge of any of it yet clerks documents say he was served)
Sue the mortgage company for the damages and try fix up and sell the house or try a short sale.

Any advice is much appreciated. We are concerned that the house we now own together which is owned free and clear is at risk if any company comes after us as we do not have any money to pay them and dont wish to pay them anything.
If I'm reading this correctly, you have 4 different issues going on. Your mothers mortgage, your mortgage and a possible lawsuit for damage to your mothers home.

1. Your probably talking about a "deed in lieu of foreclosure", not in lieu of mortgage. The homeowner (your mother),deeds the property back to the bank in exchange for the bank releasing the obligation under the mortgage. If your bank has already offered this option or a short sale, take it. Your mother walks away debt free, but no house.
2. If your Zillow estimate is over your debt balance, why not try to sell it? Don't trust Zillow for the value, but your real estate agent can give you a pretty accurate appraisal. If it looks like you could make $50-$80,000 profit then sell it and pay off the debt.
3. You can sue the mortgage company for damages even if you no longer own the home. Get a real estate lawyer for this.
4. The house you owned together should not be an issue. The bank has a lien on your mothers house. As long as you were not on your mothers mortgage, the debt is hers and hers alone.

I'm not a lawyer, but if I were you, I would get one. Your mother has a $300,000 asset that needs a professional opinion on what to do next.
 

Survivor_IN

LoanSafe Member
Until the foreclosure and foreclosure sale are completed, the property (and mortgage) is STILL in your mother's name and title. Unless, of course, if your mother signed over a deed in lieu. This information would be in the county clerk's land records. From what you've said, the foreclosure is incomplete and this means your mother still has title and (somewhat) control. Don't trust the bank on whethor or not they will come after her for excess debt after a foreclosure, this item is typically State law and where some States have anti-defiecienty laws and others don't (requiring bankruptcy to discharge it or risk debt collection on other assets). Deed in lieu or bankruptcy would prevent this. But I disagree with Jzone on the part where her other (joint) property can not be accessed or have a lien placed by HUD or whoever gets "shorted" in the foreclosure. It's a possibility, especially if there is no BK and a deficiency debt balance on the mortgage. I do agree that I would try to sell and walk out on the positive side if I had the opportunity. The current court delays/deferrals and housing market are in your favor.

Also remember while trying to sell that payoffs are negotiable sometimes. Not many reductions currently but don't let them over-bill for excess fees just because they see "profits" all the sudden.
 
Top