Foreclosure in Kansas City>Question Details

Jean, Other/Just Looking in Overland Park, KS

I have an investment property in Kansas. If this property is foreclosed on, will the bank be able to take

Asked by Jean, Overland Park, KS Sat Sep 20, 2008

more than this property? Could they put a lean on the property I live in? Thank you.

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They are not going to take more that the property that you hol das collaterlal however they can sue you for the difference and could uphold that jugdgement when you sell the other property. Great question.....hope everything works out OK for you....

David Van Noy Jr
816 536 7653
0 votes Thank Flag Link Wed Oct 1, 2008
Ute Ferdig makes some good points. An attorney could, of course, better advise you on the law. In Kansas, the owner of the property also has a longer period to buy back the property after the foreclosure sale. If you are not yet in foreclosure, it would be to your benefit to speak with the bank now. Tell them the truth. Share with them all the pertinent details of your particular situation and ask them what can be done to work through the difficulties. Maybe there is a way to avoid foreclosure. Perhaps they would accept a short sale.
There may be other options available as well.
0 votes Thank Flag Link Mon Sep 29, 2008
Hello Jean. What recourse the bank has against you after a foreclosure depends very much on the foreclosure laws in your state (i.e., Kansas) and my best advice to you is to consult with an attorney who specializes in foreclosure laws in your state. A consultation should not cost you more than $200, but you should be able to walk away with a much better understanding of what to expect.

It's my understanding that Kansas follows the judicial foreclosure method as opposed to the trustee sale method. The significance of that is that the lender can typically obtain a deficiency judgment if the winning bid at the foreclosure sale was not a full debt bid. Trying to figure out how much of a deficiency judgment you may face can be difficult as you don't know in advance what will happen at the foreclosure sale. While an attorney can't predict that either with absolute certainty, he/she will know more about what typically happens than anybody on Trulia Voices.

Assuming that foreclosure sale did not yield a full debt bid, the lender can go back to court and seek a deficiency judgment. How the bank can enforce the judgment will again depend on the laws in your state. If your primary residence is in another state, the bank will have to go through the process of enforcing a foreign judgment ("foreign" just means from another U.S. state) in your state and typically, they'll be able to record the judgment in the county in which your primary residence is located and the judgment will rear it's ugly head when you try to sell your residence or refinance as it will show up as a lien on any real estate you own in that county.

I would recommend that you try to work out a solution with the bank to avoid a foreclosure. The bank should be interested in such a solution as it is also beneficial to the bank not to have to go through the judicial foreclosure process and having to wait for the redemption period to expire after the foreclosure sale. What workout solutions may be available to you will really depend on your particular circumstances. Since this is an investment property, getting a short sale approved may be less likely as banks typically don't grant short sales for investment properties, but every bank has it's own rules and guidelines.

If there's mortgage insurance, your options will be different than when there's no mortgage insurance as the bank will be limited in what they can do when there's mortgage insurance since they would not want to do anything that would jeopardize their ability to file a claim under the mortgage insurance policy. For instance, they most likely would not be able to accept a deed in lieu of foreclosure and still collect on the mortgage insurance. I am just mentioning this, because the purpose of the mortgage insurance is to protect the lender in the event of a deficiency and some banks take out mortage insurance without the borrower's knowledge. It does not hurt to ask the lender whether there is mortgage insurance.

In summary, I would say, the possibility of a lien against your primary residence does exist, but the likelihood of it happening really depends on your particular facts and circumstances. Anybody who faces the possibility of foreclosure, should consult with an attorney and tax adviser to get a clearer picture of what to expect and how to best approach the situation. Many times, it will be a matter of picking the lesser evil.

The best of luck to you.
0 votes Thank Flag Link Sat Sep 20, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
The bank looks at all your assets to get it's money back, not just the house that was foreclosed on.
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0 votes Thank Flag Link Sat Sep 20, 2008
They definately can put a lien on your principal residence. The investment property will go to foreclosure, an auction will be held, if no one buys it the bank will take it back at 80% o fteh amount you owe. The bank will hire an assett manager to sell off the property. You then will be on the hook for tha balance of what you owed plus foreclosure costs minus what they get for the property. the bank will assess if yo have the ability to pay this now or in the future, if so they can seek collection against you. if not they will send you a 1099 and you will be responsible for teh taxes on that amount as a gain. Your best bet is to try to work with the bank. If you want to keep the property ask for the home retention department where you will have several options including rewriting the loan. if you do not want to keep ask if you can do a short sale, where the bank will take less than what you owe and allow you to sell it, you will want to hire a broker with great experience in short sales to negotiate on your behalf. if all eslse fails ask to do a deed in lieu of foreclosure an dtry to negotiate it so you are not responsible for teh deficience balance. this willbe cheapr than just letting it go. good luck Jean
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0 votes Thank Flag Link Sat Sep 20, 2008
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