"Settlers" Have Taken Over Her Property. Are they ripping her off?

Question: Dear Dick: We have a piece of property aside from our own home that is for sale about a hundred miles away. It was given to my husband after his grandmother passed. We had a prospective buyer, but they never produced the funding. They have since started working on the place, cutting down trees and fixing up the lawn and area (we have learned of this just today from neighbors). I'm not sure what their goal is for doing all this work as we did not ask them to nor did we give them the okay to do so. Someone had mentioned something called "settler rights". Do you know anything about these rights or have any idea on what they are trying to do? Sincerely, Elizabeth.

Answer: That is a bunch of baloney, Elizabeth. I strongly suggest you contact a real estate attorney who will take the necessary steps to get them off the property, PLUS pay you for the loss of the trees or any other damage to the property. Do it now before they do any more damage. One other thing: It is possible for scam artists to forge the proper documents and put the property into their names ALREADY! Especially so shortly after the passing of your mother in law. That's what scams do, especially in this economy. They look for free and clear properties that do not appear to have anybody taking care of it. Do not hesitate. Go find a good local REAL ESTATE attorney. I do wish you well.

Elizabeth was very thankful: Thank you so much Mr. Dennis, you have been a great help. This is such a blessing to be able to ask a question with someone actually knowing the answer. I hope you have a wonderful Christmas and Happy New Year.

Buying House from Mother: Should I Pay Cash For it?

Question: My mother is willing to sell her house to me, and I agreed to pay $40,000. She said a check for $15,000 would pay off the mortgage. Then she asked if I could pay her $500.00 monthly until the balance of $25,000 was paid.

I said I could do it but that ties up my money because I have to replace the garage that is falling apart and if anything comes up I'll be strapped for the cash. Should I just get a loan for $60,000, build my garage and pay her off? I'm trying to save money in closing costs and mortgage interest by just giving her the $40,000. If my job goes well, I should be able to write her a check for $40,000 by this summer 2010. What are your suggestions? Thanks -- Jason.

Answer: Well, if you don't want to wait, Jason, I would suggest you use your favorite lender to make your loan. However, be aware that the purchase price you paid for the house will leave a heavy impression on the bank. Hopefully, you have a house that would appraise for at least $75,000 because the lender is going to require you to have a 20% equity in the property if you are looking for a $60,000 loan, your credit has to be good and you have to have a good job. Be aware also that you will be paying borrowing and closing costs. I do wish you well.

About Foreclosure: Quick Response and Good Work

This question was posed to me the other day: Mr. Dennis, my question is I have a mortgage in my name only. My wife's name is only on the deed, closing documents, etc. Is she along with myself liable to pay for any deficiency when they foreclose on my house?

I dont want to file for bankruptcy. Can the bank come after me and garnish my salary? I was paying PMI and loan payments until April 2009 but we still live in the house. I dont want to have to leave to avoid because I don't want people entering residence to damage the property. Can the bank come after me for my payments being in arrears since 4/09? They (Court/Bank) haven't decided on a sale date My house is in NJ. I believe my loan is owned by Freddie Mac/BofA. Would I be required to pay taxes on the deficiency amount?

I am willing to quit-claim the deed, but the bank stated that I have to list house on market for at least 3 months first. However, at the same time, they sent me a summons from the court. Lastly, for foreclosure, do I have to physically go into court? Let me know what advice you can give me or options available to me? Thanks in advance for your time. -- Alistair.

My answer: Your wife need not worry about deficiency on your house, Alistair, as long as she was not on the mortgage. And you may not, either. New Jersey has a very confusing law regarding deficiencies after a foreclosure. To make sure you understand, I found a New Jersey attorney blog site from which you can have your questions answered. Use this link: http://www.njlawblog.com/2008/12/articles/bankruptcy-creditors-rights/deficiency-actions-after-foreclosure-judgements/

It does address almost everything you asked. As for paying taxes on the deficiency amount, forget it. President Bush signed a law 2 years ago against that. And, if you do a deed-in-lieu, definitely you'll not have to worry about a deficiency. Go to the above link and READ IT ALL. I believe it will allow you to rest your concerns. I do wish you well.

This was Alistair's appreciative reply: Dick, such a clear and quick response is much appreciated. Thanks a million. Keep up the good work. A lot of people in mortgage distress need consultations from people like you.