Expert: Dick Dennis - 12/22/2009

Question
QUESTION: Dennis, my question is I have the mortgage in my name only, but my wife's name is on deed, closing documents, etc. Is she or myself liable to pay for deficiency payments when I foreclose? i dont want to file for bankruptcy? Can the bank come after me and take payments from my salary? I was paying PMI and loan payments until April 2009 but still living in house. i dont want to leave to avoid people entering residence to damage property. Can the bank come after me for loss payments since 4/09 until they (Court/Bank) decide on a sale date? My house is in NJ. I believe my loan is own by Freddie Mac/BofA. Would I be required to pay taxes on the defficiency amount? i am willing to quit deed, but bank stated that I have to list house on market for 3 mths before, but at the same time, i receive my summons from court. Lastly, for foreclosure, do I have to physically go into court? Let me know what advice can you give me or options available to me? Thanks in advance for your time.

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

It does address almost everything you asked. As for paying taxes on the deficiency amount, forget it. Aaw was passed 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.

Dick Dennis
dixiedee13@aol.com

---------- FOLLOW-UP ----------

QUESTION: Thanks so much Dick. Very good information for me. I agree. Two more questions: I actually signed the papers for my wife using a POA. Doesn't that mean she is on the mortgage? She was not on the application application, but on all papers I had to sign for her. Secondly, what constitute amount for "foreclosure judgement", is it unpaid mortgages+taxes+insurance+principal+legal fees?

Answer
If you, as your wife's legally designated POA, signed the mortgage documents, Alistair, then, yes, she is also liable for the mortgage. If you have any doubts, consult with a real estate attorney.

You would be liable to your lender for EVERYTHING they paid for you, including taxes, insurance and legal fees because THEY PAID THEM for you. You are liable to your lender for them. If you feel the lender is charging you more than they should, then you may want to consult with a good New Jersey REAL ESTATE attorney.

Dick