Dealing with a foreclosure is always a difficult experience, adding the loss of a loved one adds another level of challenges. Although it may seem impossible, it is important to balance sentimental attachment of a property to the remembrance of our loved ones who have passed. We recommend that you that hire an attorney to help with foreclosure and allow you to keep a clear mind during this difficult time. We have outlined some of the issues that may need to be addressed.
Note vs. Mortgage
Although often times used interchangeably, there is a difference between notes and mortgages. The mortgage or deed determines the owner of a property in the eyes of state. The note is a contract between a borrower (who is also on the mortgage) and the bank (or lender) to pay back the cost of the house using the house as collateral. Both notes and mortgages can include multiple people or even different groups of people. The only requirement is that there is one person listed simultaneously on both the note and the mortgage. Knowing the distinction between a note and a mortgage is important because (in the cases where there is no formal probate) only those who are on the note are required to continue paying the note. Only signers of the note have the ability to negotiate with bank or lender regards to a loan modification.
Is there any equity in the property?
Once you have figured who is required to pay the note and who has ability to negotiate, it is time to look at whether the property should be saved. The first step is to calculate if there is any equity in the property. Equity is simply the difference of estimated property value (as determined by an appraisal) subtracted by the outstanding debt still left on the note. Having equity in a property is an important determination in deciding whether or not to keep the property (and may allow the pursuit of several foreclosure alternatives).
If you are on the note you must try to negotiate with the bank, as you are liable for the debt. If you are not on the note you have additional options. Before you can negotiate, a Bank or lender would require you to assume the loan. Assuming the loan basically means that you willing to make yourself liable for the loan moving forward. This is why it is not wise to assume a loan without any equity in the property. It is imperative to work with a lender who agrees to the appraised value if you are going to assume the loan.
Though there is often an emotional attachment to property, it may be a better decision to entertain the idea of a short sale or explore other options. Foreclosure Jax has the experience to lead you through this process and help you find the most beneficial solution.
A free consultation with an attorney will help you understand your choices, contact us.
Call 904.624.1001
