Board-certified real estate attorney Gary M. Singer writes about the housing market in this space each Friday. To ask him a question about short sales, mortgages, refinancing, homeowner's associations or any other residential real estate topic, click here.
Q: I bought my house in 2006, and I owe $190,000. It?s now worth about $50,000. Yikes! I recently got married, and the neighborhood scares my wife. Safety is an issue, and we want out of the neighborhood. If my wife buys a house and I complete a short sale or get foreclosed on, can the lender come after her? ? Jonathan
A: No. Debt is individual to the person, and it does not transfer to a spouse or other relative, unless they voluntarily agree to assume the debt. But during your wife?s application process, her lender may look at your housing situation to make sure you are current.
Q: Several years ago I bought a property with my girlfriend. Both of our names are on the title. But because of credit issues, only I am responsible for the loan. We broke up, and I am trying to complete a short sale on the property, but she is not cooperating. What can I do? ? Bob
A: While you do have some options, you are in a tough spot. In order to sell a property, all its owners have to agree to sell. You may want to explain to your ex that it is in her best interest to cooperate. That?s because if the lender sues for foreclosure, she will be sued as well, even though she is not obligated to repay the loan. That could negatively affect her credit. You may be able to take legal action against her, but the lawsuit may be difficult and expensive. It?s a good idea to have a written agreement in place before you own property with someone to whom you are not married.
Q: What happens when a homeowner stops paying the homeowner's association dues and other charges and continues to live in house? What recourse does the HOA have? Secondly, what happens when the property is sold? What money can be recovered by the association for the unpaid dues and assessments? ? Harriet
A: Almost every association has the ability to place a lien on the property for non-payment of dues and then can foreclose on that lien and take the home. When the property is sold, the homeowner will have to leave the property. The association, or whoever won the foreclosure auction, will be the new owner. However, the homeowner will still owe the lender the money from the mortgage loan and that lender can even foreclose the house out from under the association. If it does this, the owner will be credited the market value of the home but will still owe the lender for any deficiency. Also, if the bank forecloses while the former owner owes back association dues, the association can pursue the former owner personally for the money, even if the house now is owned by the bank. If it sues, it can get a judgment that would allow it to take other property and garnish wages.
The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
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