My uncle has 4 houses. He lives in 1 and 3 others are investment properties. If 1 goes into foreclosure (investment property), what about the other 3? Does foreclosure court go after the other 3?
3 Comments to “What happens when one of your houses goes in foreclosure?”
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Tim H said:
On February 15th, 2008 at 2:09 am
Each home will have a separate mortgage, even if it’s the same bank. As long as he is making payments on the others then there is no reason for them to go to forclosure just because 1 house is.
If he is not making payments on any of them then yes, they will eventually go to forclosure. Forclosure is a last resort for most banks, they would prefer to make SOME sort of payment arrangement first, but if ya aint got the dough ya aint got the dough.
Good Luck
VC said:
On February 15th, 2008 at 2:39 pm
No. The foreclosure is for only that home and it hurts his credit. That home will probably be sold in an auction to the highest bidder and cover the balance of the loan. If the home sells for more than the loan tell your uncle to ask for the difference. unfortunately I have gone through a foreclosure and we got the difference after the amount of the loan was paid off to the bank. If he hasn’t heard of that then I would say to consult with a trustworthy real estate agent or repost that question and I will find the exact words for that money return.
Shirley H said:
On February 15th, 2008 at 9:11 pm
Generally, the other properties will be unaffected as long as your uncle is making the payments.
Some lenders “cross collateralize” mortgages. That means that they lend on one property but that property alone may not be worth enough to justify the loan, may be in a state of disrepair or other reason(s). So they “cross” the loan onto another property. In that instance if one property is sold the other generally is too.
The foreclosure process in most states, potentially including any redemption period that may be available, is generally long enough to sell the property before it goes to auction. If your uncle can’t catch the payments up or if your state doesn’t allow enough time for him to catch them up, you may want to encourage him to sell the property.
If a local real estate agent can’t find a buyer fast enough check the local paper. It should be full of “we buy houses” ads. You can also contact your local real estate investing association and ask the office to let the members know about the property. The more interest that you can stir up, the higher the price will likely be.
If selling is the solution that your uncle decides on, just be sure that the buyers are qualified and capable of closing fast enough. You may also want to contact the lender and let them know about your buyer–lenders will frequently delay auctioning a property if the owner has a legitimate buyer ready to move forward. I did say legitimate…the banks are told there are buyers waiting in the wings all of the time; just be sure that you have enough documentation of your transaction to satisfy the bank.
By all means, seek the advice of an attorney who truly has experience. Not just an attorney who claims to be a real estate attorney but barely knows how to review a purchase and sale agreement. There really aren’t that many good ones available but when you find a qualified real estate attorney they are invaluable. Your uncle may already know someone since he appears to have been investing for a while.
Whatever you and your uncle are going to do, DO IT NOW! You have options early in the foreclosure process–enter into an agreement with the lender to catch up the payments over time, bring the payments current now, dispute the foreclosure, sell the property. Whatever the solution is, you are better off starting to act on your intentions now rather than latter…the time will be gone before you know it.
On February 15th, 2008 at 2:09 am
Each home will have a separate mortgage, even if it’s the same bank. As long as he is making payments on the others then there is no reason for them to go to forclosure just because 1 house is.
If he is not making payments on any of them then yes, they will eventually go to forclosure. Forclosure is a last resort for most banks, they would prefer to make SOME sort of payment arrangement first, but if ya aint got the dough ya aint got the dough.
Good Luck
On February 15th, 2008 at 2:39 pm
No. The foreclosure is for only that home and it hurts his credit. That home will probably be sold in an auction to the highest bidder and cover the balance of the loan. If the home sells for more than the loan tell your uncle to ask for the difference. unfortunately I have gone through a foreclosure and we got the difference after the amount of the loan was paid off to the bank. If he hasn’t heard of that then I would say to consult with a trustworthy real estate agent or repost that question and I will find the exact words for that money return.
On February 15th, 2008 at 9:11 pm
Generally, the other properties will be unaffected as long as your uncle is making the payments.
Some lenders “cross collateralize” mortgages. That means that they lend on one property but that property alone may not be worth enough to justify the loan, may be in a state of disrepair or other reason(s). So they “cross” the loan onto another property. In that instance if one property is sold the other generally is too.
The foreclosure process in most states, potentially including any redemption period that may be available, is generally long enough to sell the property before it goes to auction. If your uncle can’t catch the payments up or if your state doesn’t allow enough time for him to catch them up, you may want to encourage him to sell the property.
If a local real estate agent can’t find a buyer fast enough check the local paper. It should be full of “we buy houses” ads. You can also contact your local real estate investing association and ask the office to let the members know about the property. The more interest that you can stir up, the higher the price will likely be.
If selling is the solution that your uncle decides on, just be sure that the buyers are qualified and capable of closing fast enough. You may also want to contact the lender and let them know about your buyer–lenders will frequently delay auctioning a property if the owner has a legitimate buyer ready to move forward. I did say legitimate…the banks are told there are buyers waiting in the wings all of the time; just be sure that you have enough documentation of your transaction to satisfy the bank.
By all means, seek the advice of an attorney who truly has experience. Not just an attorney who claims to be a real estate attorney but barely knows how to review a purchase and sale agreement. There really aren’t that many good ones available but when you find a qualified real estate attorney they are invaluable. Your uncle may already know someone since he appears to have been investing for a while.
Whatever you and your uncle are going to do, DO IT NOW! You have options early in the foreclosure process–enter into an agreement with the lender to catch up the payments over time, bring the payments current now, dispute the foreclosure, sell the property. Whatever the solution is, you are better off starting to act on your intentions now rather than latter…the time will be gone before you know it.
Good luck!