Foreclosure sale today....now what?

[Becky C]

Our house was sold at auction for foreclosure today, in Missouri. We went to the courthouse to see what would happen -- the mortgage company entered the starting bid, and none of the other bidders would go over that amount. So the property was purchased by the mortgage company, for an amount which covers our mortgage amount plus legal fees associated with the foreclosure.

Since the mortgage company purchased the property, does this mean we are not liable for any deficiency, since their purchase price satisfied the debt? Or is their purchase just a technicality, to prevent too low of a bid?

Becky

[Becky C]

I think I found the answer

Here at this site:
Missouri Foreclosure Law

"Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: No"

Deficiency Judgements not allowed on residences. So I guess it's over!

[HHM]

well, sounds like that is it, if they do not allow deficiency judgments, then you should be in the clear. But that foreclosure will follow you around on your credit report for a while.

hopefully things will get better for you in the future.

[EdytaHome]

Here's the story. I surrendered two houses during my BK. I was able to sell one on a short sale recently. I have a buyer for my second home (my real estate agent) and wanted to sell it to her on a short sale as well. My mortgage company requires all kinds of paperwork (not like the other house) in order to approve the short sale. They want: Credit report, 2 years of tax returns, 3 months of bank statements, pay stubs... EVERYTHING. My husband says we shouldn't do this (basically sign our life away) because I bought the house on a STATED INCOME LOAN. I didn't have to provide a thing other than my signature when I bought the house. The mortgage guy wrote in a number, whatever I needed to make in order to be able to afford the house. I don't even know how much that was.
Now the mortgage company is threatening me, they said if I don't sell the house on a short sale and if I let it go into foreclosure, I will owe negative equity. They told me they got some kind of release to do this before my discharge. I called my lawyer and he said all they got was a release from automatic stay and that they can't make me pay anything because I got the house discharged in the bk. Who's telling the truth. They are very persistent about this, they told me to even call their lawyers. The whole reason I filed the BK was because of this house! And now they're telling me I have to pay $20,000 - $25,000?
I'm worried about the short sale paperwork, there are papers they want me to sign stating that if the sale is not approved I'm responsible for all of their expenses incurred. I'm also worried about fraud problems because of this Stated Income Loan.
Help...
What about Michigan Law?

[Becky C]

We had received a cash offer on our house 2 days before the foreclosure sale; it would have been a short sale. The mortgage company would not even tell me that they would LOOK at the offer and try to prevent the house from going to foreclosure, and said it often takes 4 weeks for them to process the short sale application.
My husband and I felt that their pages and pages of financial questions were not things we wanted to voluntarily disclose, so we refused the buyer's offer and never even submitted it to the mortgage company.

I wish I knew what to advise you -- you should be able to trust your attorney, but if the mortgage company is claiming something else, can you afford to get another attorney's opinion?

Becky

[EdytaHome]

The paperwork for the short sale is my concern. My lawyer now says, no matter wha they can't collect money from me because the house was discharged in BK. Should I just do the short sale? It's so much better for my credit report.

[mark]

Becky,

Call the morgage company and tell them that you what to work out a surrender of possession agreement. Tell them that you want to move out but you have no money. They may offer "cash for keys" in order to avoid an eviction proceeding. I got 30 days and 1100.00 bucks. It is a very common practice in post foreclosure situations.

Good luck,

Karmrd

[wannabedebtfree]

We are in Missouri. I am wondering about our situation. We have been contemplating filing bankruptcy but really don't have a lot of unsecured debt, just over extended. We have been living extremely tight the past year and after the bills are paid we have about $100 left for food, clothing, etc. We have a mortgage and a second mortgage. $1400 a month. We owe way more than the place will sell for. We have had it up for sale in the past with no luck. We have tried to do improvements to the house but just end up finding more problems. We are needing to move before January and really feel stuck!! We have found a place in the town we are moving too and the owner wants to finance it for us. I just don't feel bankruptcy is right for us and am thinking foreclosure might be an option. Especially since reading this thread and realizing we can't be sued for the deficiet. (I hope that is correct.) I really don't see any other way out! Please offer any advice you might have. We had the wheels in motion to file BK, but everyone keeps saying we are not bankrupt just overextended. Need advice!!!

[wannabedebtfree]

Also wondering if the house sells will that money be paid to only the 1st mortgage?? The 2nd mortgage is through Beneficial? What will happen to it?? Again, we are in Missouri. Anyone? Thanks in advance.

[Minnymouth]

EDYATHOME,

According to what you have said "your lawyer says your home was discharged in bk".....
Now the bank wants to do a short sale, and have you sign papers if it doesn't sell.
Well, I wouldn't sign those papers for sure ... Let them worry about selling it........without your help....
You sign those papers for them, you'll be "paying" if it doesn't sell.....
My bank was "crying" over a 2nd mortgage they had on my home. Both was discharged in BK....... they wanted me to "reaffirm" on the 2nd mortgage - DUH... sure!!!!!
Once your "discharged" - your DISCHARGED......

Since you have a BK on your credit report, a foreclosure is going to mean very little.....

Just a thought,

Minny

[Minnymouth]

Wannabedebtfree,
When the house sells (if it does), the 1st mortgage holder is paid, then any excess is applied to the 2nd mortgage. If not filing BK, then any balance owed you are still obligated to pay.
They could come in a put a lien against anything else you may own or purchase in the future till they get their money. Course they would have to get a judgment against you first, I think.

In Bk the 1st and 2nd mortgage would all be discharged.

Consult 2 attorneys and see what they say. Their consultations are free..

Keep us posted,

Minny

[Becky C]

You are Not liable for the deficiency in MO

We live in MO also. It's my understanding that you cannot be held liable for any deficiency after foreclosure in MO. Your situation sounds very similar to ours. We purchased the place where we live now with owner financing, then abandoned the house that we were unable to sell, and let the bank foreclose. Your credit rating will be affected, but you'll be out from under that debt, without the cost of declaring bankruptcy. Good luck!

Becky