Tuesday, May 5, 2015

Is my Investment in Property Secure after Homeowner on the Note Goes thru Bankruptcy and Foreclosure?

Question: I am on the deed (but not the mortgage) of my son's house. The son is planning bankruptcy and foreclosure without consideration of doing a short sale of the property. I have informed him that the short sale is less damaging in the long run, but he is not listening. I was trying to help him by giving money to buy the house and put my name on the deed to insure I protected my investment, but I fear now with the bankruptcy and foreclosure or the short sale I will be jointly liable for the issues. What are our problems now with the upcoming bankruptcy and foreclosure?

Response: The only party responsible for payment after foreclosure is the party on the note, so if it’s your son, he would be the only one liable. If he will file for bankruptcy, then his personal obligation under the note will be discharged and he will no longer be responsible for the deficiency. Maybe he is doing a deed in lieu of foreclosure since foreclosure itself happens at the bank’s initiative, not the borrower’s. Of course you will lose your initial investment in the house if there is a foreclosure but do not worry about paying the bank back.
As a New York State Licensed Real Estate Broker, Attorney Svetlana Kaplun has the expertise to assist interested homeowners in all steps of the short sale process including: bank negotiation and short sale approval, property listing and sale.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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