Can I Settle With Underwear?

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

- I have given them my home back.

The lady on the phone is screaming. She said she gave the house back to lender in foreclosure, and now they are going after her for deficiency.

Can I Settle with Underwear?This is the same lady that told me to get lost when I suggested we could do the short sale. She spoke to her accountant, and then decided going with foreclosure.

She stayed in the house for a bit over 2 years, and got used to it, but finally Flagler County started processing foreclosures. Now she got a letter demanding money. And she is pissed off.

I love that freaking logic. She took money from the bank, and decided to return them a house? Did they ask for a house in return?

No, they gave her money expecting to get back money, and house was just a security.

Since when you choose what to return?

You took the money, you have to return the money. Not the house, not your car, not your underwear…

And yes, the Lender can take it, but be ready for a deficiency judgment if the underwear is less than what you owe. In Florida the Lenders can do it.

Why not follow the contract, and if you default, face the consequences?

It was me who was telling you about the deficiency judgment if you go foreclosure route. But you did not want to listen.

So, don't scream at me, scream at your accountant.

Photo by storebukkebruse via Flickr.com

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  1. Bob Crane 08/16/2012 09:22 PM
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Rainmaker
255,143
Tim Bradley
Commercial Real Estate Expert in Jackson Hole, WY
Contour Investment Properties

She can't call her accountant. He charges by the hour...

August 10, 2012 11:06 AM
Rainmaker
315,140
Dave Halpern
Louisville Short Sale Expert
Keller Williams Realty Louisville East (502) 664-7827

People get bad advice from lawyers, accountants, co-workers, people they meet at the flea market, neighbors, friends, family, and from garbage articles they find on the internet.

We can only help those who are willing to listen.

August 10, 2012 11:12 AM
Rainer
201,775
Nan Jester
Realtor, Exit Real Estate Gallery
Exit Real Estate Gallery Jacksonville Beach, FL

Thank goodness we are not allowed to act as accountants OR attorneys.  You tried. Very disgusting that she reacted with such entitlement. You play, you pay.

August 10, 2012 11:17 AM
Rainmaker
409,541
Michelle Francis
Realtor, Buckhead Atlanta Homes for Sale & Lease
Tim Francis Realty LLC

Jon, 

Sadly folks think they can put their head in the sand and their problems will disappear.  DEALING with challenges will always be better.  It puts you in control to make better choices.  We find folks don't want to deal and then aren't happy with the end result.  REALLY?

While there are folks that have a lot of factors out of their control, it's disturbing the amount that don't and just believe they can walk away with no issue.

All the best, Michelle

August 10, 2012 12:15 PM
Ambassador
683,273
Charita Cadenhead
Serving Jefferson and Shelby Counties (Alabama)
Keller Williams Realty
The accountants and attorney's advice is always going to be to foreclose. And the homeowner will probably most often follow that bad advice.
August 10, 2012 12:38 PM
Rainmaker
1,368,994
Donna Harris
Realtor, CDPE & ASP - Hill Country Lakeway Austin
Regent Property Group

But she lives there rent free/mortgage free for 2 years... where is that money that she saved?

August 10, 2012 02:26 PM
Rainmaker
283,015
Charlie Dresen
Steamboat Springs, CO e-Pro
Steamboat Sotheby's International Realty

Well, you tried!  It looks like she will have to face the consequences of her decision.

August 10, 2012 04:08 PM
Rainmaker
597,087
Petra Norris
Realtor, Lakeland FL Homes for Sale
CDV TransAtlantic, Inc.

Jon - I probably would have hung up on her after I told her to call her accountant. 

August 10, 2012 05:58 PM
Ambassador
1,229,022
Erica Ramus
MRE, Schuylkill County PA Real Estate
Erica Ramus - Ramus Realty Group - Pottsville, PA

When people are upset they lash out and scream at those who are nearest, not those who are in charge or can fix it.

August 10, 2012 06:23 PM
Ambassador
1,502,387
Ed Silva
Central CT Real Estate Broker Serving all equally
RE/MAX Professionals, CT 203-206-0754

Jon, I don't give advise on accounting or legal advice. The accountants and lawyers should respect that thought and not give advice on real estate

August 10, 2012 06:40 PM
Ambassador
1,266,588
William Johnson
San Diego Real Estate Voice, GRI CRS e-Pro CDPE
RE/MAX Associates
Hi Jon, Congratulations a terrific post and certainly worthy of feature. In our country today the publicity and the volume of foreclsoures made many feel that since they weren't the only one, it must be OK too just hold out. While we are a nation of laws and contracts that are breeched have to be eventually be reconciled, I think those charged with giving advise and guidance does not insure that it might or might not be in the consumers best interest. Sadly, there is no one right answer and we as REALTORS® have no authority or the right type of license to give advise even if we might disagree or even if we might have been correct in our opinion.
August 10, 2012 07:14 PM
Rainer
195,731
Beth Paterson
NMLS #342859
Reverse Mortgages SIDAC, NMLS #173899

Staying in a house for 2 years and not making payments...what did she expect?  She was lucky to have two year.  It's amazing to me on how many people don't look at all their options and the pros and cons of each then make bad decisions and blame someone else. Great post, Jon!

August 10, 2012 08:04 PM
Rainmaker
797,014
Marte Cliff
your real estate writer
Marte Cliff Copywriting

Just think - if they had waited until January to foreclose, she might ALSO owe income tax on the forgiven debt.

But why yell at you? Because you didn't force her to do the short sale? Because you didn't make her house payments for her? What??

Unfortunately there will always be people who blame everyone except the person looking back at them in a mirror.

August 10, 2012 10:42 PM
Rainmaker
477,913
Robert L. Brown
Grand Rapids Real Estate Bellabay Realty, West Michigan
www.mrbrownsellsgr.com

Not an uncommon story here. People trying to live somewhere for free. It's always someone elses fault.

August 11, 2012 08:20 AM
Ambassador
1,294,915
Praful Thakkar
Andover, MA: Andover Luxury Homes For Sale
Keller Williams Realty

Jon, this reminds me  of a terrible experience I had with my solo short sale listing where seller decided to file bankruptcy two hours before closing! Still hurts when I think of that incidence!

August 11, 2012 08:25 AM
Rainer
20,969
Tyler & Mike Bolaski
FirstTeam Real Estate

Find a good attorney/CPA that you can partner up with that REALLY understands short sales. Most attorney's are not very familiar with non-judicial foreclosure or short sales and often give erroneous advice to clients. While you can't prevent your client from talking to their own people....if you have a good Attorney/CPA that you can send them to, most will see the light. This has helped tremendously for me with showing people the real advantages of a short sale....and they get their legal/tax advice squared away at the same time. 

It's funny after 2 years of living for free she still feels like the world owes her something. Typical! 

August 11, 2012 10:31 AM
Rainer
141,632
Robert Sole
REM Inspections LLC

I don't understand why so many people think that they can take out a loan, and then quit paying on it.  All this while continuing to live in the home. 

August 12, 2012 06:21 AM
Ambassador
1,328,532
Jon Zolsky, Daytona Beach, FL
Selling Daytona paradise for heavenly good prices
Daytona Condo Realty, 386-405-4408

Robert - I can understand when people get in trouble and can't pay, this happens. WHat I do not understand is when people would sign, get the money and buy a house, and then think that because the house decreased in value, they can give it back to the Lender and not being asked for the difference.

They refuse to understand that they borrowed money on certain terms, and these terms did not include adjusting the balance according to the market.

So, yes, if you borrowed money, return money, not the underwear, even if the house bought with this money is now worth not more than underwear

August 12, 2012 09:45 AM
Ambassador
896,385
Bob Crane
Forestland Experts! 715-204-9663
Woodland Management Service

Thanks for sharing this Jon, its sad that lack of character is accepted and practiced so often, and to have a cpa recommend it just makes it that much worse.

August 16, 2012 09:19 PM
Ambassador
1,328,532
Jon Zolsky, Daytona Beach, FL
Selling Daytona paradise for heavenly good prices
Daytona Condo Realty, 386-405-4408

I am not placing much blame on her accountant. I remember that she was questioning me how long would she be able to stay in the home, and my answer that it would be a few months, while the short sale process makes it to cosing, and she just liked the idea of staying for free for couple of years.

 

August 16, 2012 09:54 PM
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Jon Zolsky, Daytona Beach, FL

Selling Daytona paradise for heavenly good prices
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