The Law Offices of Robert E. Brown, P.C.

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The Law Offices of Robert E. Brown, P.C.

A foreclosure stays on your credit report for seven years. However, I’ve had clients where the foreclosure doesn’t show on their credit report at all or they’ve been in foreclosure for so long that it’s came off their credit report, even though the foreclosure lawsuit hadn’t been completed. This can open the opportunity to save money and simply buy a new house after their credit is no longer affected.

If My Foreclosed Home Sells For Less Than What I Owe, Will I Still Owe The Bank?

If you owe four hundred thousand dollars and your house sells for three hundred thousand, the bank can come after you for the hundred thousand dollars that they lost. The bank can seek a deficiency judgment in the foreclosure action or it can sue you for breach of contract for the deficiency on the note. Generally, if you do a short sale and you negotiate a deed in lieu of foreclosure or cash for keys as part of the negotiation, then you can negotiate a waiver of deficiency. The last thing you want to do is give up your house and not get the bank to waive any deficiency judgment against you. You have to be aware of that and you have to protect yourself against it as best you can.

Is It Ever A Good Idea To Walk Away From Your Property If Foreclosure Is Inevitable?

I’ve seen many people who start looking for an apartment as soon as they’re served with a foreclosure complaint, which is one of the worst things you can do because the house is going to be in your name for a long period of time. You’re going to vacate it. You’re still going to be responsible if someone slips and falls on that property in New York. You still have to worry about snow removal and garbage removal and vandalism. The best route to take, if you want to be rid of the house, is to negotiate cash for keys. I’ve gotten significant amounts of money in the negotiation of cash for keys. Make sure that in the settlement you get with the bank, they waive any deficiency judgment and take responsibility for anything that happens in or around the house.

Make the bank responsible for maintaining the house; making sure that the pipes don’t freeze in the winter, making sure that snow is shoveled, and that insurance is in place. Those are all important factors to negotiate. Cash for keys, in my experience, arises two ways. One way is called a deed in lieu of foreclosure. That means you’re deeding the property back to the bank for a certain amount of dollars. The bank accepts it and will usually renovate the house or at least clean it up before putting it on the market to sell it. The other commonly referred to concept which would fall under cash for keys is what we call a consent foreclosure. You may have judgments against you or a second mortgage, and the bank doesn’t want to take a deed from you because they don’t want to be responsible for any of those. Instead, you will consent to go through the entire foreclosure process and will stop fighting the bank. You will let the house sell at auction.

You want to make sure that if you do consent to either a foreclosure or a deed in lieu of foreclosure that the agreement contains a waiver of any deficiency judgment against you. It’s very important to avoid giving back your house and then being sued later on because the bank had a shortfall and they’re coming after you for it.

For more information on Foreclosure And Credit Reports In New York, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (212) 766-9779 or (718) 979-9779 today.

Robert Brown

Call For A Free Consultation
(212) 766-9779