In a previous post I wrote about states pursuing deficiency judgments against homeowners. In a web link to www.foreclosure.com there is information on the state of Missouri that may be in error. It states that deficiency judgments are not allowed in Missouri.
I spoke with an attorney who works in a title company I use. He told me that banks can pursue deficiency judgments against foreclosed homeowners in Missouri. He said that he had represented banks who did so.
As always, the information here is not to be assumed to be legal advice. Consult a real estate attorney for the real scoop on legal questions involving real estate.
According to a real estate blog, there are reports that banks in the state of Florida are getting aggressive and going after deficiency judgments against homeowners who walk away from their mortgages. A deficiency judgment is allowed in some states. It is the difference between the mortgage owed and the sale price of the house after foreclosure.
In states like Florida, this can be big numbers. Say you had a house with a mortgage of $500,000 but now that the market has gone south it’s only worth $250,000. When the bank forecloses and sells your home, they can come after you for the remaining $250,000.
In places where the market value has plunged off a cliff, some homeowners are walking away and letting banks take back their homes. But in states that allow deficiency judgments, banks may start playing hardball. Deficiency judgments vary by state, so always seek legal counsel in making your decisions.
Here is a link to a website outlining Missouri foreclosures.
Here is a link to a website outlining Kansas foreclosures.
photo credit: Aaron Gustafson
The tax credit clock is ticking for buyers. To qualify, you will have to have a contract by the end of April 2010 & close by the end of June. But I just read that the IRS just “clarified” the qualifications. They said that a binding contract must be signed by all parties that need to authorize the sale. In the case of a short sale this could mean that even now it is too late.
Some lenders move to approve short sales at the speed of a dial-up modem. A signed agreement today might take well past the end of April to be approved for a short sale. You can read more on this subject by clicking HERE.
If you are looking to cash in on the tax credit, work with a realtor who can advise you on the realities of the market and get your home closed in a timely manner.
Disclaimer: I’m not an attorney or tax adviser so these comments are not to be taken as legal or tax advice.
Termite damge to window frame
Termites can eat the equivalent of a two foot 2 x 4 in a year. But they don’t eat all that wood in one place. They leave paper thin remnants to use as a highway to the rest of the house.
A potential buyer told me about a house she had her eye on. It was a foreclosure, so I went by to have a look. The first thing that hit me when I opened the door was the odor of cat urine. The carpets looked clean–perhaps they had been shampooed. But whatever number of cats who had lived here previously didn’t see fit to use a litter box. The pee was somewhere in the carpet, the pad, and probably the sub-floor. If it’s in the sub-floor, even new carpet won’t help. You have to strip out the carpet and pad, put an odor-killing sealer on the sub-floor, and then install new carpet.
The odor was severe, but treatable. The rest of the house was in dire need of updating. But could be fixed as well. But if I were thinking of making an offer, it would be significantly less than the asking price.
But when I went outside I saw where the termites had been. They had eaten the
Termite damage on siding.
siding and around a window frame. It was more than just cosmetic damage here. I saw the wall bowed a bit right under the window. I’d seen termite damage like this before. Long ago I set out to repair what looked to be a small amount of termite damage and ended up replacing all of the floor and 2 exterior walls in a living room.
If I were ever to buy a house that has termite damage, I would give myself a large margin for error when estimating repairs. The problem with termites is that the damage is hidden. You really don’t know what you are getting into until–well, until you get into it. You have to start demolition before you know how far the damage goes.
With the amount of other good deals on the market, I’d much rather just go down the road and find a house that’s not at risk of being a money pit.
