Pacun Posted August 16, 2007 Report Share Posted August 16, 2007 Client lost her house and husband continues to pay his current house. While trying to get out of the whole mess, lady gave information to realtor about properties in her home country because she wanted to sell properties overseas and continue paying house here in U.S. I have two questions. Since her house was sold to her about $50K more than real value and the house devaluated, can bank go after her properties in her country? Can the bank go after her husband's home? Loans were completed separated when houses were purchased. Realtor was suggesting to wife to file for bancruptcy but her husband has a house, and she has property in her country which makes her solvent. Quote Link to comment Share on other sites More sharing options...
jainen Posted August 16, 2007 Report Share Posted August 16, 2007 >>I have two questions<< Answer is yes to both. The bank CAN "go after" those resources. Whether it is worth trying, and whether they will succeed, is something for the lawyers to argue about. Assuming the foreclosure did not fully satisfy the debt (which probably under law it did), the bank can force her into court to reveal all her assets. Seizing property overseas is very hard and expensive so they might not bother. They might be able to attach the husband's house if they can prove she has a marital property interest. My advice would be for her to pay her legal debts. It's almost always cheaper to do that, all things considered. Quote Link to comment Share on other sites More sharing options...
Pacun Posted August 16, 2007 Author Report Share Posted August 16, 2007 Thanks for your answer. Wife walk away from house and eventually bank will do a foreclosure on the house. How will wife know if debt was not legally satisfied? How does it work when you have a 20-80 loan and two separate banks have each loan? It is my understanding that the banks that holds the 80% loan is the one that does the foreclosure without considering the little guy (the bank that holds the 20% loan)? Let's say a $500K debt. $400K for the banks that forces the foreclosure and $100K for the bank that holds the 20%. Let's say the bank sells the house for only $390K. Do both banks split the money 80-20 or the big guy gets they whole pot? How will the wife know that she still owes the little guy if she just walked away from the house? Thanks in advance for your time and answers. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted August 16, 2007 Report Share Posted August 16, 2007 I believe its the first mortgage which is satisfied. The second is an equity line which may or may not be a recourse loan. Quote Link to comment Share on other sites More sharing options...
jainen Posted August 17, 2007 Report Share Posted August 17, 2007 >>its the first mortgage which is satisfied<< Since she defaulted on both mortgages, either one could act. If the 1st wants to foreclose, they would give the 2nd an opportunity to pay off the 1st themselves. Otherwise, the 2nd only gets whatever is left over (if anything) after the 1st is covered by the sale. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 20, 2007 Report Share Posted August 20, 2007 Wife walk away from house and eventually bank will do a foreclosure on the house. How will wife know if debt was not legally satisfied? How does it work when you have a 20-80 loan and two separate banks have each loan? It is my understanding that the banks that holds the 80% loan is the one that does the foreclosure without considering the little guy (the bank that holds the 20% loan)? Let's say a $500K debt. $400K for the banks that forces the foreclosure and $100K for the bank that holds the 20%. Let's say the bank sells the house for only $390K. Do both banks split the money 80-20 or the big guy gets they whole pot? How will the wife know that she still owes the little guy if she just walked away from the house? The wife will get a legal notice when the house is to be sold, and then she will get notice of any remaining debt. You really can not say that the house "was sold to her about $50K more than real value" because it was sold to her at a price she agreed to. That means that, at that time, she considered it a fair value, as she was willing to pay that much. If she overpaid, that was her fault, not the bank's. As to who gets paid, the holder of the 'first' mortgage gets paid first, which means that sometimes the holder of the 'second' mortgage will bid on the house at foreclosure, to protect their interest, if they think the house is worth it. The odds are that they will not waste money on trying to go after the property in another country, unless it's worth a lot and the country involved has laws favorable to doing so. But they may well go after the husband's assets, if either she has an interest in his property, including dower rights. Or if he is a co-signer on her note. I'd advise her, if she were my client, to try very hard to sell the property herself, rather than let it go to foreclosure. Not only because it would help her credit, but because she might end up getting a better price for it. It's a sad but true fact that sometimes bankers sell foreclosed property to friends or relatives at bargain prices, when they believe they can get the difference out of the other assets of the borrower. Or they simply sell it at auction, where it almost always goes for less than it is worth. In many cases, properties bought at foreclosure auctions are then given a cheap face-lift with new paint, perhaps carpet, maybe a few cosmetic changes, and then resold at substantially higher prices. Why not advise her to do those things, and sell it herself? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.