A real estate “closing” is the event where parties meet in order to consummate a real estate transaction. At a typical real estate closing, where one party is selling real estate to another, the parties who will attend the closing consist of the sellers and their lawyer, the buyers and their lawyer, the bank's attorney, the title closer, and one or more real estate brokers.
Oftentimes, a Debtor files a Bankruptcy petition that will stay a pending foreclosure. Should the Debtor seek relief under Chapter 7, all property of the Debtor becomes property of the Bankruptcy Estate and subject to disposition by the Chapter 7 Trustee, with court approval. Should the Chapter 7 Trustee determine that there is no equity in the mortgaged premises, he/she will “abandon” the property, and title will then revert back to the Debtor. The Debtor must then either pay the secured debt, or “surrender” the property to the Secured Creditor in satisfaction of, at least, the secured portion of the debt.
Years ago, banks were not permitted to make second mortgages, and the people who borrowed money secured by a second mortgage were perceived to be in financial difficulty.
A “short sale” is a sale of real estate in which the proceeds from the sale will be “short” of the aggregate amount needed to pay, in full, the liens secured by the property being sold.
How much can you sell your house for?
The “fair market value” of real estate is defined as the amount that the house will sell for if the seller is not under any pressure to sell and the buyer is not under any pressure to buy. Accordingly, if you are selling your house, have already signed a contract to buy another one, and only have a two-month timeframe to sell, you are under pressure to sell and may have to accept a “below fair market value” offer. (See my article - “Should I Buy a New Home Before I Sell My Own”).
Should I buy a new home before I sell my own? The short answer is: It depends.
If you want to minimize your financial risk, then you should sell your current house first and then buy a new one. If on the other hand, you want to minimize your inconvenience, then you should buy your new house first and then sell your current one.
Prior to the establishment of the United States, people in England who did not pay their debts were sent to debtor's prison. Today, in the United States, there is no debtor’s prison and creditors can only enforce judgments if they can locate the assets of the judgement debtor, and have them sold to liquidate the debt or by garnishing their wages. If a debtor truly has no job or assets, he is said to be “judgement proof” because a judgment creditor has nothing to sell or garnish. Many debtors, however, merely pretend to be judgement proof! They really do have assets, but attempt to hide them.
On December 3, 2015, the United States Court of Appeals, 11th Circuit, decided the case of Kevin Prescott v. Seterus, Inc., 635 Fed. Appx. 640, 2015 U.S. App. LEXIS 20934 (11th Cir. Fla. 2015) and held that the inclusion of estimates or anticipated costs that have not yet been incurred, in a payoff or reinstatement letter, is a violation of the FDCPA.
As noted in my previous article, “Statute of Limitations,” New York’s six (6) year Statute of Limitations is tolled for the time the bankruptcy is pending, (CPLR section 204) and renewed for an additional six (6) year period if the debtor acknowledges the debt in writing. (GOL 17-101)
In the first two parts of this series of articles, we discussed the short sale programs offered by HAFA (Home Affordable Foreclosure Alternatives), Fannie Mae (Federal National Mortgage Association; FNMA) and Freddie Mac (Federal Home Loan Mortgage Corp; FHLMC).
