Foreclosure and Loan Modification Blog

There's some “good-ish” news for New Yorkers because early last week, NY Attorney General Eric T. Schneiderman announced the launch of a new New York State Mortgage Assistance Program (“NYS MAP”). This program will create loans of up to $40,000 (not more than) available to homeowners that are hanging on their last thread before foreclosure. The “good-ish” aspect stems from the ability to secure another loan to save your house, which is great don't get me wrong, however, you will be getting ANOTHER LOAN (uhm, even more debt). But then again, I guess incurring more debt is better than losing your house, am I right? Since massive debt has become a concept that's even more commercialized than McDonalds (don't you love them McMuffins?)    

Atty General Schneiderman says,

In a far away kingdom long long ago... Better yet, substitute kingdom for United States of America around (more or less) 7 years ago, and brace yourselves for this tragic novella.

Do you remember that time when the stock market crashed (AGAIN) and the whole country thought it was circa 1930's Great Depression part deux. Yeah, you know, that time when the security-backed mortgage bubble burst and everything went down the drain... Sparking a flashback?

Should have saved this segment for Halloween because deficiencies induce blood-curdling, spine-tingling misery... Too much?!?

DEFICIENCY JUDGMENT?

First of all, a deficiency after foreclosure is exactly what it sounds like, it's when one owes a mortgage lender money after the foreclosure sale of their home because the house sold for less than the mortgage balance (did you think all the debt went kaput after foreclosure, yeah right!).   

For example:

Say the total debt owed is $220,000, but the home only sells for $160,000 at the foreclosure sale. The remainder to be owed back to the lender is $60,000, hence a deficiency.

Yes people, that's $60,000 you STILL have to pay back to the lender, you can't just say ala- kazaam and voila, gone! (If only... I can only imagine being able to do that every month with my credit card statement... anyways that's beside the point...)

Ok, so where were we?... Yes, the flipping horror of a deficiency after foreclosure, hanging above your head like a black cloud, every single day... I mean, in all fairness, it could be worse...? (wishful thinking?)

The nitty gritty is, even if you feel like you can ignore this black cloud, it comes back to haunt you. In some states, “The lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount (in our example, $60,000) from the borrower by doing such things as garnishing the borrowers’ wages or levying the borrowers’ bank account.”

THAT'S NOT ALL:

“What is the difference between a taxidermist and a tax collector? the taxidermist takes only your skin."  

      - Mark Twain

That's right people, today we're going to be talking about taxes (I know you'd much rather stab your leg with a fork, but listen closely, this might change your life).

Let's see how many types of taxes we can come up with real quick..... Sales tax, income tax, social security tax, payroll tax, breathing tax, walking tax, existing tax, occupying space on this earth tax.. Am I missing any? … Oh yeah, almost forgot about PROPERTY TAX. The one tax you thought you could maybe, sorta get away with... Really though? Did you think you could get past uncle Sam that easy... naïve much?

Anyways, as a homeowner, there is one tiny little responsibility that is impossible to avoid, (I mean, other than your mortgage, HOA fees, pool cleaning service, landscaping, whatever else comes with a home... well ok that's more than one thing but bear with me here) and it is property taxes, yet another tax to add to the arsenal of never ending governmental blood sucking.. Alright, alright, so I'm a bit cynical, but hey, I pay taxes just like you.

Like I said, you HAVE TO pay your property taxes (only if you're a homeowner of course, renting doesn't count), whether you want to or not (non-debatable), uncle Sam's got an iron grip on this one. So what happens if by slight oversight (or you willingly outright don't feel like paying them) forget to pay them?..

There's a growing pollution problem in Massachusetts, but for a change, it has nothing to do with the Charles. Many Bay State lenders are saddled with toxic titles in the wake of the “apocalyptic” ruling in U.S. Bank v. Ibanez. That case, decided by the Massachusetts Supreme Judicial Court in 2011, dealt a serious blow to banks involved in the slice-and-dice securitization of residential mortgages which contributed to the 2008 market meltdown. Now some new legislation may fix all that at the expense of former homeowners.