July 31, 2009

Deficiency Judgments

Hi Paul:

I went through a bad divorce that ended with a foreclosure and a deficiency judgement of $90000+.

Would like to purchase another home in a couple of years and I am eligible for a va loan, but the judgement has to be paid or being paid on. The judgement is joint with ex and i can not afford to pay 1/2 of it nor all of it. 

Should I go ahead and file bankruptcy and try to repair my credit immediately. 

The wait for a va loan after foreclosure is 3 years and 2 years after bankruptcy discharge.

Rachel (more…)

July 30, 2009

Credit Repair Myths Debunked

Filed under: Credit Repair

Hey Brian,

Does disputing a high percentage of derogatory accounts reporting on a credit report invite the credit bureaus to dismiss your dispute a Frivilous? Is it better to go after a few at a time or is it OK to dispute most if not all of the derogatory credit items?

Peter (more…)

July 28, 2009

Courtroom Gambler

Filed under: Florida,Foreclosure

Greetings Paul,

In re: The case discussed at:

While doing some research, I checked the Duval County docket on this case and noticed some additional pleadings;

11/21/2008     MOTION TO COMPEL

As you notice, there has been no activity on this case since November 2008.

I was wondering if you have kept up with this case, and if you have obtained the additional pleadings on this matter.

Also curious as to your thoughts on why there is no recent activity on this case.

Curtis (more…)

July 27, 2009

Luxury prices keep falling

Filed under: Real Estate

Chicago Tribune – After lowering the $4.2 million asking price of their Lake Bluff estate three times and by more than $1 million, Mike and Marti Palmer flirted with the idea of trading the still-unsold custom home for something smaller.

They own 70 percent equity in the 9,700-square-foot home perched on a wooded ravine near Lake Michigan, and are by no means “distressed sellers.” But they have been forced to think creatively about how to market the 15-room, English-style manse — now going for $3 million — amid a recession that has hit the upper bracket especially hard.

“Unfortunately, we put it up just before everything tanked,” said Mike Palmer, a financial consultant who is pragmatic about the competition. “Everything is on the table.”

Real estate agents say they have never seen prices drop so precipitously when dealing with opulent, often empty high-end homes along the North Shore that cost a small fortune to maintain and keep secure. Though homes in the $400,000-to-$700,000 range have weathered the financial storm better than expected, the glut of eye-popping mega-mansions has owners competing for the attention of a select few.

“It is a phenomenon we’ve never seen in our lifetime,” said real estate agent Jason Hartong with Rubloff Residential Properties, who has seen some multimillion-dollar price tags cut nearly in half.

Nationally, the scenario is much the same. The pool of people wealthy enough to afford such luxury already represented a small sliver of the marketplace. Home transactions priced at $750,000 or more made up 4 percent to 5 percent of transactions before the recession, said Lawrence Yun, chief economist of the National Association of Realtors.

Today, only 2 percent of housing transactions are taking place in the same upper-end price range, Yun said.

“Many of the wealthier people have their wealth tied to the stock market,” he said. “Given that the stock market is down 30 [percent] to 40 percent — even with the recent run-up — that has eaten into their financial resources.”

At the same time, lenders are hesitant to approve so-called jumbo loans that are necessary for some buyers to finance a million-dollar-plus property, said Terese Penza, president and CEO of the North Shore-Barrington Association of Realtors.

Developers, many now in bankruptcy, were caught by surprise, as well. Vacant and unfinished homes dot the Chicago suburbs, with for sale signs that tout the “New Price.”

For instance, a custom-built stone home at 750 Sheridan Rd. in Winnetka priced at $5.5 million in November 2007 is going for $3.3 million.

It’s enough to make builder Farhad Nikamal sick, as he describes the loving attention he paid to detail in planning the two-story reception hall with marble flooring, a Brazilian cherry staircase, hand-carved travertine marble fireplaces and a 1920s French chandelier.

“This has cost me almost $3.9 million,” said Nikamal, leading a tour through the house, protected with wrought-iron gates and a security system.

He believes that many potential buyers are bargain-shopping and have been brutal in taking advantage of the poor economy. “People should understand, right now, this is beyond a bargain,” Nikamal said.

He is considering raffling off the 6-bedroom, 8-bathroom luxury home, which sits across the street from Lake Michigan. “You are not going to see this again,” he said, shaking his head.

Less than a mile away in Glencoe, a renter occupies a 15-room white-brick monolith at 501 Greenleaf Ave. The home, owned by a developer and constructed in 2007, has dropped to $2.8 million from the original asking price of $4.3 million.

Like many other properties in its price range, it features a wine cellar and bar, exercise room with access to a sauna, heated marble bathroom floors and stainless-steel appliances.

“It’s been tough to keep deals together,” said Matthew Schneider, a real estate agent with Coldwell Banker, who slipped off his shoes before walking through the pristine house. “Buyers are really out for the best deal. There are definitely people taking advantage of the situation.”

The sluggish sales remind real estate agents of the last severe downturn in the 1980s, when inflation and interest rates that hit 16 percent contributed to a weak housing market.

Julie Morse with Griffith, Grant & Lackie Realtors views some leveling down of prices as a healthy adjustment after years of an upward spiral. “There has been a softness in the market coming up on two years,” she said.

The number of North Shore homes sold for $1 million or more dropped to 572 last year — down 39 percent from the 935 homes sold in 2005 — a peak year — according to statistics provided by the North Shore-Barrington Association of Realtors. As of June this year, only 154 homes in that category have sold.

Another affluent community, Barrington, has seen 17 homes priced at $1 million or more sell through June this year compared with the 55 sold during the same period in 2005, the data showed.

Those dismal figures could be welcome news for Sheldon Good & Co., a Chicago-based auction house that deals in upper-bracket home sales.

“As the market becomes more challenging, the sellers are more attracted to the auction,” said Michael Fine, executive vice president.

High-end, custom-built homes already are difficult to price because they can’t be easily compared with neighboring homes, he said. During a recession, other factors make it even tougher for sellers to figure out what the market will bear.

Over the last month, he said, he has fielded inquiries from home sellers on the North Shore and in the western suburbs, as well as from such vacation communities as Door County, Wis.

“I would expect we would do double or triple the numbers we have done the last few years,” Fine said.

As they try to sell their home in Lake Bluff, the Palmers are offering an added incentive — setting aside $20,000 for a buyer to help with the property taxes. The annual tax bill is now a whopping $60,000, but they believe that when the property is reappraised the taxes will be lowered, if appealed.

With only one of their four children still living with them, they are eager to downsize and move on with their lives. Meanwhile, they’re trying to be creative but realistic.

“Everyone is in the same boat,” said Marti Palmer, who has been looking at other homes. “You can’t buy if you can’t sell, so we’re open to ideas.”

July 25, 2009

Delinquent Property Taxes

Filed under: Bad Credit,Real Estate

I’m not sure if you can answer this question. I’ve been reading it to clear up my credit but I have a different question now.

I’ve been renting a house for about 8 years and for the last 5 years I’ve been paying the property taxes. We heard that you can sometimes get a house by paying the property taxes. Is this true?

Lenore (more…)

July 24, 2009

The Gal At The Loan Modification Place

Filed under: Foreclosure

I heard that veterans cannot be foreclosed on. Is that true?

I don’t know if it’s VA loans or loans for veterans–I heard this from a gal who worked at a loan modification place. I was wondering if it was true. I’m a veteran.


Rick (more…)

Credit Repair Do’s & DON’TS!!

Hey Brian, 

Once a negative item has been deleted from your report how long does it take for your score to go up?  If a bureau has not replied within 45 days a reinvestigation via mail is it true that those items have to be deleted by law. I hired a credit repair company and she said to just pull a new report in which they have not made any changes. Responding via mail means nothing the USPS can be slow. 

What are your thoughts? Please advise?  I always thought they had to be deleted because of no response isn’t that true?

Thank-you Kindly!

Diane (more…)

July 22, 2009

USDA Subrogation

Filed under: Bankruptcy,Foreclosure

Here’s my story…I bought a home with my ex (fiance at the time) about 5 years ago in Michigan. The original mortgage was for $85,000 with no money down.  My ex was listed first on the home and I was the co-signer.  The bank told us that in order to purchase the home, I needed to be the co-signer.  We were also advised by the bank to get a USDA Rural Development Loan, as it was easy for first time home buyers in areas like ours.

We broke up a few years later and I stayed in the house with my two children.   He was not willing to put the house up for sale or try to negotiate with the bank.  And since I was just technically the co-signer, the bank was not willing to work with me.  I couldn’t afford the mortgage on my own. The mortgage company offered to give me $2500 to move out, so I did.  The bank sold the home for $35,000.  I’ve since paid off my car, credit cards and other debts while trying to move forward in my life.

Recently I received a letter from USDA Rural Development, stating that they paid off the bank the difference between the mortgage owed and the selling price, and I will now owe the USDA $60,000!  The letter states that I have 60 days to declare bankruptcy, start making payments, or they’ll transfer the debt to the IRS or a collections agency. I have not had any other contact with them.
I have spoken to two lawyers.  The first lawyer said that I should file Chapter 7 Bankruptcy and that my case shouldn’t be a problem.  Since I am currently unemployed and a single mother of two, I have a high debt to income ratio.  The second lawyer said that he wouldn’t file a Chapter 7 for me.  He said that he wasn’t sure if the loan was a dismiss-able debt since it is owed to the government.  The attorney stated that he would first file Chapter 13, and then if it was decided to be a dismiss-able debt, he’d file Chapter 7.

I am only 26 years old and have no way of paying $60,000 for a home that I don’t even have.  Advice please!

Destiny (more…)

July 21, 2009

Me & My $134,000 Motor Home

Filed under: Judgment,Repo


I have a loan on a 2007 motor home for $134,000 that I can not afford to keep making the $1002 a month payments on.

The problem is that the RV industry and the economy have made the value on this motor home maybe $75,000 now.

If I do a volutary repossession or if it is repo’ed in Oregon which is a anti-deficiency judgement state will my other assests like my car or my Certificates of deposits be liened on.

What can I expect to happen?

James (more…)

Collection AFTER Foreclosure

Hello Paul,

Several months ago, my Arizona home, which is also my primary residence, was foreclosed upon.  As it happens, the property was sold back to the lender via a Sheriff Sale.  From what I can see Chase Bank basically used the foreclosure as a means to take the property from their left hand and put it in their right hand.   

I had two loans on my house, a first mortgage with Chase and a second mortgage (HELOC) also with Chase.  I did not ask for the second mortgage, but when I refinanced my first mortgage several years ago, Chase insisted on including a HELOC. 

As has been true with many other homeowners, bad things happened to me, both on a personal and professional level.  So I ended up owing about $450K on my first mortgage and about $150K on my HELOC.   When my home value crashed, I had no means to extricate myself from the situation, even via a short sale and so ended up losing the house in foreclosure. 

All of this was bad enough.  But yesterday it just got worse.  I received notice from Chase that they are now attempting to collect on the second/HELOC. 

I’ve been on several websites trying to figure out exactly what my exposure is in this situation.  There are lots of opinions that run the gamut from “no risk whatsoever”, to “you’re screwed”.   It would be nice to have some clarity about what Chase can do — as well as what Chase is likely to try to do in this situation. 

Any insight you may offer would be sincerely appreciated!

yours truly,

Bill (more…)

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