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Old 03-01-2004   #1
looking buisy
Join Date: Jan 2004
Posts: 70

hello,i bought a house 2 years ago,and was deciding to sell,but now my morgager tells me that i owe 3000. on property tax.thinking about saying screw it,and not paying/foreclosing.can anyone give me some insite on what the bank will ask of me,or what can they do to me other than screw up my credit for seven years. the thought of it all has been really overwhelming,not sure what to do next,please help. [/quote]

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Old 03-01-2004   #2
Join Date: Dec 2003
Posts: 71

I'm not an expert, but I've screwed up my credit before. When they sell your house (after foreclosure) any balance will fall in your lap. That is, after the mortgage balance is paid, property tax paid, liens paid, and all of the foreclosure/realtor expenses are paid you will receive the balance, or the bill, for what is left. Bear in mind that these people do not try to get good money from your investment. So, you may well (after only two years) still be getting a bill for a house you no longer even live in. I think you would be far better off if you steer your own ship and sell the place yourself. Watch out for realtor fees.

If you have equity, you might be able to get a second mortgage. If you have been mistreating your credit already, don't give up. There are creditors who will take risks. Check with Beneficial Finance, for one.

Also, get a roommate. And/or a second job. Pay the taxes--you will be very happy in the future. I jacked up my credit b/c I didn't think it mattered out of college (student loans). It's 5 years later, and I'm just starting to get good credit again. It has been hard starting my own business on account of poor decisions years ago. A little sacrifice now (maybe no/less riding this winter or kayaking in the spring) will go a long way in years to come. Just b/c you don't have the money now and can't get a second doesn't mean you are entirely screwed either. Call the debtor and explain your problem and your intent to pay the debt. They will work out a payment plan that will allow you to make payments. These days creditors know that they take it on the nose every time they have to forclose on a place, so they try very hard to keep customers in the house making payments, even if it is reduced. Your lender might even allow you to pay a reduced amount (interest only) for a short time. Contact them and tell them your concerns. If you work this out and stay/sell on your terms you will be happy you did.

Good luck.

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Old 03-01-2004   #3
Caspian's Avatar
Englewood, Colorado
Paddling Since: 1978
Join Date: Oct 2003
Posts: 882
Mortgage companies foreclose based on money you owe them. Sounds to me like you owe your local government money, not the mortgage company. I don't see how foreclosure would change things if you owe property taxes. And if you don't owe the mortgage company, how are they to foreclose? More to the point, Colorado law provides that the you must pay the attorney's fees on foreclosure. I have a client right now whose house was foreclosed on for a $600 default. The attorneys' fees he's responsible for are now approaching $4000, on top of his default amount.

This should NOT be taken as legal advice. You should talk to an attorney if you want that. I'm just a student relating a story and not an expert, so I suggest you talk to a real attorney.
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Old 03-01-2004   #4
pnw, Washington
Join Date: Oct 2003
Posts: 3,404
Well thought out, excellent advice. Good work guys.
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Old 03-01-2004   #5
Join Date: Oct 2003
Posts: 85
Letting them foreclose on you should not even be considered. Unless you live in a tent, I can't imagine that $3,000 isn't worth paying. I don't know where you live or how your loan was structured, but I highly doubt you wouldn't lose more money through foreclosure. Depending on where you live I would also thinking about selling it yourself, so you don't have to pay 6% to Realtors. My 2 cents.

On a side note.. Caspian most lenders pay your taxes. They usually estimate it, and you pay 1/12 of it every month.
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Old 03-01-2004   #6
Join Date: Oct 2003
Posts: 388
This isn't rocket science.

Pay what you owe. No one is trying to swindle you. Nothing should be a surprise.

You bought a house. Everything you were going to pay was clear and laid out. Perhaps you didn't look.

Are you seeing if there is a way to milk the system? You're a looser.

Sell your boat.
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Old 03-01-2004   #7
Join Date: Feb 2004
Posts: 152
Whoa, cstork. How about a little support, rather than a big dick.
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Old 03-02-2004   #8
looking buisy
Join Date: Jan 2004
Posts: 70
thanks for all the good feedback(except for the looser remark) i knew i could depend on the people of this forum to show me the safest line. sounds like foreclosing would be a really bad move,one that i thought was a easy way out. i'll pay the shortage amount, put this blood sucker up for sale,and return to a rental,eventully buy something smaller for me,and my family.thanks again.
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Old 03-02-2004   #9
Join Date: Mar 2004
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Don't worry Marv, better to be looser than a loser!
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Old 03-02-2004   #10
TimWalker's Avatar
Colorado Springs, Colorado
Paddling Since: 1992
Join Date: Oct 2003
Posts: 205
Marv, this is not the best place to get advice on real estate and foreclosure but the advice to pay the taxes you owe is certainly the easy way out, if that's all you owe. But you may not be aware of the whole picture. I'm a Realtor in Colorado Springs so I am more familiar with the El Paso County public trustee information on foreclosure, but it is basically the same for all counties in Colorado. Here are some basic questions to answer:
1. Have you received a right to cure statement from your mortage company?
2. Where is the tax bill coming from?
3. Did you have escrow accounts set up to pay the taxes and insurance on your house? I ask this because my credit union screwed up, didn't pay my tax bill on my house and the county was ready to sell the debt at the county tax sale. I received notice of the possible sale of the back taxes and had to act quickly. I had paid the taxes and insurance through my mortgage payment escrows and it was a simple oversight by the mortgage company.

There are so many variables.....really I would have to know where you are in the process to help. I wouldn't suggest anyone going through foreclosure if it can be helped. The truth of the matter is that foreclosure will eat up money in attorneys' fees, it will ruin your credit, the deficiency debt after the public trustee sells your house will follow you, and it is not the right thing to do if you can avoid it. Feel free to email me or call.

There are many sharks out there, ready to circle when people get into foreclosure problems. There are some scum bag Realtors. Watch out what advice you take....attorneys won't always steer you in the right direction either, rather they may steer you down the path in which you will pay a fee to them. Divorce attorneys don't make money saying "go to a counselor", bankruptcy attorneys don't make money saying "pay your bills."

Looks like you've been missing a lot of work lately.

I wouldn't say I've been *missing* it, Bob.
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