Carolina (nc)

Q: I desperately need some advice concerning the sale of my hom..I am behind in the 1st and 2nd mortgage payments..The 1st mortgage holder is going to start foreclosure proceedings on March 13th...I am unemployed and living in the home..I have no source of income, as I have neglected to file for unemployment as of yet. There is enough equity in the house to pay off most of my debts, including what is left of the 2nd mortgage..The house needs some repairs before it would sell through a realtor..Whom should I contact about a quick sale, below market value, in order to not loose the house to foreclosure..A mortgage broker? I haven't a clue, as I have never sold a home before

A: First, call the mortgage holder. They'll probably be very willing to work with you. Foreclosure takes time (usually, *lots* of time), which costs money (carrying costs such as the cost of the money not being paid, insurance, taxes; the probability that you're not maintaining the property, since you're broke, which will mean they may have to fix it up before selling it; legal fees; the chance that your equity will be eaten up as the unpaid balance increases with each unpaid monthly installment, so they'll actually lose money on the foreclosure sale). They don't want to foreclose. They've also been through this before, so they should know in general how to do it most efficiently. On the other hand, they don't have your interests in mind, and don't know (and probably aren't interested in knowing) your particular circumstances. So you should probably talk to the realtor in your area with the best reputation for intelligence, flexibility, and truthfulness. And then with another one, to double-check. If there's a second mortgage, talk to the second mortgagee. If there's mortgage insurance, talk to the insurer. Get a book from the library (or even a bookstore) on selling a house. Get a book on buying a house. There are newsletters for people who buy houses in foreclosure; find one. Check the Web. Since you have equity, filing for bankruptcy may not help, except to slow foreclosure down (which it would). But check out your state's exemptions; I seem to remember that Texas (if that's where you live) has a quite hefty exemption for a personal residence. It may well pay you to get down to the unemployment office and start getting those checks, so you can ask the mortgagee to wait a while or decrease your payments (most will) while you get back on your feet. Then you can keep the house, or sell it in a more leisurely fashion so as to realize its actual value. (But don't forget you have to pay taxes on any gain on sale, unless you roll it over into a new and more expensive house or you're over a certain age (I think 55); and, since basis isn't necessarily the same amount as the amount of your mortgage, you may even have to pay tax if you sell for less than your mortgage amount.) Basically, you need to learn about this. It's not the sort of thing the Net can tell you all about. Too important to leave to strangers, anyway

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