<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by ramos3:
My husband owns a 50 yr. old house which he can't sell for what he owes. We're way over our heads and are considering a possible foreclosure. Can you please tell us what type of lawyer we can contact to get info. on whether or not the mortgage company can sue us, garnish our wages, or if they just call their insurance company and take over the property. We know it will ruin my husband's credit, but need the other information please. Thanks!<HR></BLOCKQUOTE>
Contact a real estate lawyer. You need to do what is commonly called a "workout". Several options include just giving the property back to the lender to avoid foreclosure (deed-in-lieu of foreclosure) or having the lender approve a short-sale whereby the property is sold for the highest sales price possible within the shortest amount of time below market and less than the principal loan amount. The difference would be forgiven by the lender.
If the lender does not accept any of the various workout options, the lender can file foreclosure action (the lender suing you for payback of their loan) and sell the property at a foreclosure sale. In your case the property would be sold at less than the mortgage balance leaving a balance due. This balance plus attorneys fees and court costs would be the amount that you would still owe. The lender would get a judgement against you and both the foreclosure action and the judgement may be reported to various credit reporting agencies and appear on your credit report. With a judgement in hand the lender could file for garnishment of your wages.
The insurance company for your mortgage company would not take over the property. If the insurance you refer to is mortgage insurance, then the insurance company would cover a minor percentage of the loan amount that was insured such as 5-10 % but never a majority of the loan amount. EX. property has a loan of 100k with mortgage insurance insuring 10% of the loan amount or 10K. If the property sold for $90K there would be a difference which you would owe of $10K. Because you have mortgage insurance for the $10K, the insurance company would pay the mortgage company the $10K for you.
