How do I best help a family not lose their house?

Question

I'm trying to help a family who is a month away from their house going up for sheriff's auction. I'm trying to help them not lose everything. Any suggestions?

Jerry W. · Answer

@Meghan McCallum, you need to supply us with the amount of outstanding mortgage, monthly payment, including insurance and taxes.  We need to know the present value of the property, the general location, if it has any major problems that if fixed could raise it's value, and finally the income levels of the folks in the property if you want to keep them in it.  Once we have that information we can better craft an answer to your question.

JD Martin · Answer

If there's no equity and the sale will fulfill his obligation (i.e. he won't be sued by the bank to make up the difference, the house is their only recourse), it's probably better to let it go. Not every house is worth saving. What can he rent a comparable house for? Why does he want to save this house - sentimentality or some idea that it's going to explode in value?

He's about a year behind on the mortgage. What has he been doing with the money he was (formerly) using to pay the mortgage? If the answer is pay other bills, it seems obvious he probably can't make it work.

William Hochstedler · Answer

With only a month left before the sale, this conversation is happening way to late without someone with a lot of experience getting involved.  It's very difficult to get reinstatements or mods after two weeks before the sale.

A bankruptcy will place an automatic stay on the sale.  If they have other debt, this may be a good option.

Either way, with such a short timeline, they need to be talking to someone with experience.  As @Bill Gulley says, an attorney is probably a good place to start.

Bill Gulley · Answer

Here we go again, help you out of foreclosure, why, he made the bed!

Kids? Do they suffer because of the sins of the father? We could address that to every unsuccessful dad out there! Part of life.

To cure the kids suffering, why not just rent them a nicer house, that solves the kid's side and much of the dad's issues as to where to go and what to do next.

The only ploy I see is how do you get your hands on that property, that's more to the issue here.

The best thing for that guy to do is to see an attorney at this point.

You mentioned the guy had saved some money, now that might be an issue in a short sale, the bank will want some of that, so in order to keep his cash he may need to trade that off with his credit dinged for 3 years, if he changes his ways he can put that behind him, it's not a life sentence and the lesson learned might be a good start in being a better provider for those kids!

You can't save them all, nor should you try to. :)

Steve Vaughan · Answer

Best option at this point for them is s short sale most likely. They need an offer to present to the bank.

Short sales are without recourse for the default balance owed.

The best short sale realtor in the area needs to be retained if someone's not waiting on the wings to buy.

They need to save their money for a change. A move is coming.

You are sweet for trying to help and I admire that, but don't give a drunk a drink, Meghan. Some need to hit bottom before changing behavior.

JD Martin · Answer

I guess I should have been more specific in my own post :)  For example, a sheriff's sale may be because they are light years behind on a mortgage, don't have a mortgage but haven't paid their taxes, are losing the house to satisfy some other judgement, etc. If you get advice on dealing with the outstanding mortgage but they don't owe a mortgage but have $100k in back taxes to deal with, it's not going to be helpful. @Jerry W. is exactly right in that without those specifics anything anyone tells you might be worthless for your situation.

PS: Most of the time, once you're that close to auction on the courthouse steps, you're probably not going to save the house. Hate to be Debbie Downer but that's the reality that needs to be confronted and prepared for.

Brett Goldsmith · Answer

Loan Modification or reinstate. If the property is underwater these are the common remedies.

If it has equity there may be other solutions.

John Thedford · Answer

@Meghan McCallum

Unfortunately, this is an every day situation. They should have tried to work things out quite some time back if they are within a few days of foreclosure. Wanting to help is commendable but you probably won't be able to in this situation. This will be a tough lesson for the owner that hopefully they learn from and don't let happen in the future.

Brent Coombs · Answer

If they had a decent Lender, their repayments should be less than $900/m (including property taxes and mortgage insurance)! But if they aren't managing that, and, you insist on helping relocate them, how will you be assured of getting YOUR monthly rent checks? ($117k is NOT a large mortgage).

Seems to me they should try to to ride it out (if they still have any of those "toys":- SELL). My 2c...

Mark Davis · Answer

I really admire you genuinely wanting to help,I really do. But if he's at the court steps already it's probably too late to save. By the time he tries to talk to the bank about a short sale it'll be sold already. The truth is we can't save everyone. As much as we may want to. And if he has a lein against the property it's a waste of your time and money. Especially if the home isn't worth what he owes. It's too many unknowns for me to even think about trying to put money into. But best of luck

How do I best help a family not lose their house?

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