Tag Archives: foreclosure

Will Aishia get a deficency judgement?


Deficency judgement continued….


Aisha

In October of 2011 I showed a house for a buyer.  The owner was home.  She is a lovely lady who developed breast cancer.  She was paying her mortgage until she couldn’t work because of the cancer.  Aisha is a single mother who now has a reasonable job.   She tried to get a loan modification but her bank wouldn’t talk to her.  They tried to tack on all sorts of fees and call it a loan modification. Aisha has two mortgages.

When her home either short sales or is foreclosed on she will get a deficiency judgment for the second mortgage.  So first you get sick. Then you lose your job. Then you lose your home. Then you get slapped with a deficiency judgment for the entire second mortgage.

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Losing your home to foreclosure


I was asked by my representative at the Idaho Statehouse to tell stories of hardship.  The stories are real and the names have been changed:

John

I listed the home in February 2008. It is probably what drove me to my run for Congress. It made me mad enough to run. It was a short sale with Wells Fargo. John is a school teacher.  He and his wife took out a second mortgage on his home. The home appraised for $30K more then the home was ever worth.  Five months later, his wife left him.  He didn’t know he was upside down until he tried to refinance according to the divorce decree. He tried to pay the mortgage but released that he was selling everything he owned make the payments.  Without his wife’s income he could not make the payment.

I listed the home and dropped the price to $185K.  In April I had a good offer at asking price.  The bank would not let me call in and talk to a negotiator.  In the end they rejected the offer even though it appraised for 98% of the offer.  That is very good for a short sale.  They didn’t tell me they canceled the file for over a month.  Everyone I talked to gave me a different story.  One person said it was that the second wouldn’t settle.  My client would have settled a bit  of money to make the deal go fast (we were within the 3 month window of nonpayment of the mortgage).  We upped the price and never got another offer.  My seller was so upset that he moved before the foreclosure.   The home foreclosed in February of 2009 and the bank sold the home in May of 2009 at $165K.  During the summer a company called him asking for a $70,000 deficiency judgment.  At this point I became involved again.  The company was willing to settle for $7000 but John didn’t have the money.  We went and saw a bankruptcy lawyer.  We offered the bank $3000 at the end of summer school.  They said they needed the money right then.  I explained that he wouldn’t have the money until he got his summer pay.

In the end John, who only had the mortgage against him, had to declare bankruptcy.