Foreclosure in New Jersey>Question Details

Sleepinbeauty, Other/Just Looking in Camden County, NJ

what are my financial responsibilities after foreclosure? I abandoned my house (condo) due to unbearable, unhealthy living situations / environment

Asked by Sleepinbeauty, Camden County, NJ Wed Jul 7, 2010

I am disabled and on a fixed income raising my children and had to leave due to our lives and safety (due to surrounding outside danger!!!). Any suggestions? I can't get help getting current again, because there are no programs available if it's not owner occupied. By why should my family have to risk our lives (LITERALLY) because of this mortgage? Any help is greatly appreciated!!! Thanks!!

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6
Sleep -

If there is only one mortgage on the property (not a 2nd or 3rd, etc.) you shoudl contact the lender who holds your mortgage and ask for the "Deed in Lieu" department. Typically this will be fast and painless depending upon your actual circumstance. You basically Deed the property back to the lender.

As others have said, you could do a short sale BUT, whatever the safety issues are, you will have to disclose the issue to potential buyers which will likely push them away from buying the property.

Call your lender TODAY and ask about "Deed in Lieu" . It will not work if you have more than one mortgage on the property.

Best of luck,
Thom Colby
Broker / Owner
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We never double-end a transaction in our brokerage.
0 votes Thank Flag Link Wed Jul 7, 2010
Hi Sleep,

You should consult an attorney, but if you have decided not to live up to your obligations with respect to the mortgage, bankruptcy might be your only option. Bankruptcy is a bad option, but it is probably better than just abandoning the property and destroying your credit score and reputation. Seek an attorney's advice as this is a legal problem. There are no programs for this sort of thing, just lawsuits.

Good luck!

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes Thank Flag Link Wed Jul 7, 2010
WHY dont you do a short sale instead of just letting it foreclosed? You dont have to live in the property to short sale it. This will be of less impact on your credit and accoding to HUD you could get back on your feet and buy another property in about 2 years. If you dont want to do a SHORT SALE, you could do a DIL(deed in Lieu). Its called friendly forclosure. It still be less of impact than foreclosure, but greater of impact than Short Sale. (Short sale<DIL<Foreclosure)
Any questions, feel free to contact me!
0 votes Thank Flag Link Wed Jul 7, 2010
Thank you for your question. I want to express my heartfelt sympathies for you and your situation. If you do not feel safe the best thing to do is leave, no matter what anyone tells you.

There is something called constructive eviction that you should speak with a lawyer about. It basically means you were evicted due to circumstances beyond your control. This probably won't apply unless it is other residents you fear.
0 votes Thank Flag Link Wed Jul 7, 2010
Financially you could be responsible for what ever the difference is between what you owed the bank plus costs to foreclose and what they sell it for. Before last week you might have avoided this liability but the lending industry is cracking down on walk aways and pursuing these type of deficiencies with vengeance.

Unfortunately you have also left yourself in a predicament as far as moving forward with future credit and housing, see the ramifications of foreclosure below, walk aways are a solid 7 year wait.

Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of Foreclosure

Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like; insurance rates, your job (yes employers are checking credit records these days).

Your credit score will be reduced by 200-400 points, short sale and deed-in-lieu-of a little less 100-200 points.

All forms of foreclosure stay on your credit report for 10 years.

After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure – “YES” Short Sale and Deed-in-lieu-of are forms of foreclosure
• Buying after a Walk Away Foreclosure
The waiting period is 7 years
• Buying after a Foreclosure
The waiting period is 5 years with 20% deposit up to 7 years.
• Buying after a Foreclosure with Extenuating Circumstances
The waiting period is 3 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.
• Buying after a Short Sale
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Short Sale with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.

In addition to the waiting period and minimum down payment, you will be required to have a minimum FICO score and the home purchase must also be the principal place of residence, not a rental nor a vacation home.

Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.

Good Luck
Bob Patrick
Buy a home after foreclosure expert
0 votes Thank Flag Link Wed Jul 7, 2010
Not knowing all your personal details--in order to best protect yourself consider consulting with an attorney who specializes in real estate--most professionals do offer a free consultation--or if you absolutely cannot afford one, contact your local Legal Aid Society and ask for anm attorney who does pro-bono work--free.
0 votes Thank Flag Link Wed Jul 7, 2010
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