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Home Mortgage issue question

Discussion in 'Banking, Finance, Investments' started by gmane215, Sep 16, 2020.

  1. gmane215

    gmane215 Law Topic Starter New Member

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    Hey guys i'm new to the forum! My mother is in a tight situation but wondering what's the worst outcome.

    My father passed five months ago and she is not able to afford the house by herself, the county just raise the house tax again by 3%, and he did not leave any income behind for anybody to use.

    Another bad part is, she had to get a 2nd load modification to save the house a few years ago due to domestic issues which now the loan balance is over $30,000 from what the house is worth. So if she was to sell it, she is not able to walk away free & clear!

    If she was to walk away and leave the house, What's the worst thing that can happen to her? Can the bank seize her bank account after awhile?

    She did file Chapter 7 bankruptcy two years ago but it was to clear her credit debt from my father maxing out credit cards on joined accounts, her credit is now in great shape finally! As far as i know, she not able to file Chapter 7 bankruptcy until seven years after she filed first one from what i was told?

    Any advice is appreciated. Thanks
     
  2. flyingron

    flyingron Well-Known Member

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    Eight years actually. There's not enough detail here to tell. If your mother is over 50, she can avail herself of PA's property tax relief.
     
  3. adjusterjack

    adjusterjack Super Moderator

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    A deficiency judgment against her if there is a foreclosure. That's a bad thing.

    A judgment will allow a bank account levy. Worse, if she has her bank account in the same bank as the mortgage the bank likely has a right of Set Off where it can take her money to make the payments as soon as she stops paying them.

    An alternative to foreclosure is a short sale where she sells the house for less than what's owed on it and the bank agrees that the money is payment in full and waives the deficiency.

    You can google all that stuff and review it with her.

    You and she had better review her bankruptcy case file. A chapter 7 lists and discharges ALL debts. You don't get to pick and chose what you want to keep. She may have already discharged the mortgage loan, unless she reaffirmed it. She may have to go over the file with her former bankruptcy lawyer because most people have no clue about what happens during bankruptcy
     
  4. flyingron

    flyingron Well-Known Member

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    There are limits on deficiency judgments in Pennsylvania. They are capped to the FMV. So unless there's a second mortgage here, the deficiency is likely going to above the cap.
     
  5. zddoodah

    zddoodah Well-Known Member

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    The worst thing that can happen is that she'll get sued and have a judgment entered against her, which will make her wages subject to garnishment and her bank account(s) subject to levy. There are, of course, other ways to try and enforce a civil money judgment, but wage garnishment and bank levies are the overwhelmingly most common ways.

    There's no question here, despite your use of a question mark. You wrote that your mother obtained a second mortgage "a few years ago due" and that she filed bankruptcy "two years ago." When did she obtain the loan relative to the bankruptcy filing? Did she list both the first and second mortgages on her bankruptcy schedules? If not, why not? Did she reaffirm either or both mortgages? Did her bankruptcy result in a discharge? These are important questions, so please answer each one (even if the answer is "I don't know") and, if you don't understand anything I'm asking, please say so.
     
    Zigner likes this.
  6. zddoodah

    zddoodah Well-Known Member

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