By Christopher A. Combs
Find answers to the questions and more Hotline questions and answers addressing the following topics by clicking on the category in italics above each question. Visit AARonline for more hotline topics.
Loan Modifications
Homeowner Can Remove Personal Property Prior to Foreclosure
Q: The homeowner is delinquent on the monthly mortgage payments. A foreclosure sale is scheduled. Prior to the foreclosure sale the homeowner wants to remove the refrigerator, built-in microwave oven, and the electric stove from the home. Is the homeowner legally entitled to do so?
Loan Modifications
Homeowner Must Leave Foreclosed Home
Q: A foreclosure sale has been scheduled. On the day of the foreclosure sale an investor outbids the lender and obtains the title to the home. The investor demands that the homeowner vacate the home the next day. Must the homeowner vacate the foreclosed home the next day after the foreclosure?
Loan Modifications
Lender Must Obtain Judgement Before Garnishing Wages
Q: The homeowner cannot make their monthly payments on the home equity line of credit (“HELOC”). Can the lender garnish the homeowner’s wages or bank account after the HELOC is delinquent the first month?
Loan Modifications
Homeowner Is Personally Liable For Homeowner’s Association Fees
Q: The homeowner did not make the monthly mortgage payments and lost the home at a foreclosure sale to the lender. The home-owner also did not pay the HOA fees for the previous six months. Can the HOA sue the lender (the new owner of the home) for the delinquent HOA fees?
Loan Modifications
Investor Will Not Qualify for the Government’s Loan Modification Program
Q: An investor hired a general contractor to construct a home with the intention of selling the home after completion of the construction of the home. The investor must now begin making payments on the $800,000 construction loan because the home is completed. The investor wants to lower the payments through a loan modification and wait until the housing market improves to sell the home. Will the investor qualify for the new Home Affordable Modification Program (“Program”)?
Loan Modifications
Government’s Loan Modification Program Does Not Include Principal Reductions
Q: The homeowner cannot make the monthly mortgage payments and a foreclosure sale has been scheduled. The home is worth $100,000 less than the mortgage. If the homeowner qualifies for the Home Affordable Modification Program (“Program”), will the lender reduce the mortgage balance to the current value of the home?
Loan Modifications
Government’s Loan Modification Program Does Not Require Homeowners to Be Delinquent
Q: The homeowner is current on the adjustable mortgage loan. In two months the interest rate will adjust higher, increasing the mortgage payment by $200 per month. The homeowner will then be unable to make the increased mortgage payment. Must the homeowner be late on the mortgage payments to qualify for the Home Affordable Modification Program (“Program”)?
Loan Modifications
Homeowner May Qualify for Refinance
Q: The homeowner is current on the mortgage loan and has money in savings to continue making payments. The value of the home, however, is less than the current mortgage loan amount. Will the homeowner qualify for the Home Affordable Modification Program (“Program”)?
Loan Modifications
Listing Broker Must Disclose Loan Modification To Potential Buyers
Q: The seller and the buyer have signed a Contract with the Short Sale Addendum and they are waiting on the approval of the lender. The seller now wants to do a loan modification with this lender. If the lender agrees to the loan modification, the lender will obviously not approve the short sale and the seller will remain in the home. Does the listing broker need to inform the buyer of the seller’s attempt to do a loan modification?
Christopher A. Combs, Phoenix attorney, is a partner with the firm of Combs Law Group, P.C., and is on the AAR Legal Hotline team.
Note: The following is for informational purposes only and is not intended as definitive legal or tax advice. You should not act upon this information without seeking independent legal counsel. If you desire legal, tax or other professional advice, please contact your attorney, tax advisor or other professional consultant.
Note: Q&As are not “black and white,” so experienced attorneys and brokers may disagree. Agents are advised to talk to their brokers/ managers when they have questions
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