Question on foreclosing

[Canadjun]

@barbitu8

I know this is a computer question but I will ask it here anyway. I have Win 10. Anytime I get a Windows Update (like today, but actually yesterday), the system reverts to the Win 10 before I added shortcut items on the desktop and task bar. I want to do a system restore prior to the reversion, but I cannot find System Restore in Win 10. I searched "system, “restore,” and looked in the control panel and settings. I cannot find “computer” on the search. In Win 7 I would just get to the properties of “computer.”

I think that happens because of the update, but it may be because it is the 27th of the month.

reported (not relevant to thread)

[barbitu8]

I typed that in the wrong thread. I thought I deleted it.

[Some_Call_Me.Tim]

@barbitu8

The sale has to be a “judicial” sale; I.e., pursuant to a court order. The mortgage is actually a lien that has to be foreclosed. State laws vary and there is a type of mortgage called a “deed of trust” wherein the title is conveyed (state laws vary) but even then there must be a foreclosure sale although the period of redemption may be shorter. I do not know how the mortgage can be foreclosed through a non-judicial sale.

This is correct in theory; Deeds of Trust and Mortgages are technically different things. Most of the western US only has Deeds of Trust but everyone still calls them ‘mortgages’ in spite of that label being technically incorrect.

There are few western states that even allow mortgages; I’ve seen an actual Montana mortgage, for example, and I think they’re possible in Arizona, but the rest of the west is all Deeds of Trust. That’s where I have experience; my understanding is that it’s reversed in the midwest and eastern US and most states are mortgage only.

This was one of the reasons that at the height of the crisis it took years to foreclose in Florida - they all had to go through a courtroom.

[simster]

@Doctor_Jackson

Good explanation, but there is one “gotcha” - the former owner may well owe taxes on the amount of the loan forgiven (the unpaid balance). The IRS considers debt cancellation to be income, not just for mortgages but pretty much any loan:

It’s not cut-and-dry, but many people got hit with surprise tax bills after a foreclosure.

On the gotcha - in that case, assuming the former owner is insovlent or even just ‘upside down a bit’ - all they have to do is provide notification and some level of proof to the IRS and that tax is wiped out.

[barbitu8]

@Some_Call_Me.Tim

This is correct in theory; Deeds of Trust and Mortgages are technically different things. Most of the western US only has Deeds of Trust but everyone still calls them ‘mortgages’ in spite of that label being technically incorrect.

There are few western states that even allow mortgages; I’ve seen an actual Montana mortgage, for example, and I think they’re possible in Arizona, but the rest of the west is all Deeds of Trust. That’s where I have experience; my understanding is that it’s reversed in the midwest and eastern US and most states are mortgage only.

This was one of the reasons that at the height of the crisis it took years to foreclose in Florida - they all had to go through a courtroom.

Deeds of trust in Illinois (which I am most familiar with) are used when there are multiple bondholders for shopping centers, high rises, and other properties that run into much money. A bank is usually the trustee and the property is conveyed to the trustee (using the words “convey and warrant” - mortgages say “convey and mortgage”) to secure the indebtedness, which are actually held by other parties. When the bonds or notes are satisfied, a “release deed” is issued to the mortgagor (trustor). When the note(s) of a mortgage are satisfied, a “satisfaction piece” is issued because the mortgagee did not receive title. However, in practice they are treated alike. In Illinois a full foreclosure and a full period of redemption is present. In some Midwestern states, there are truncated proceedings and the period of redemption is shorter for the deed of trust. After the decree of foreclosure by the court, a certificate of sale is issued to the successful bidder, and the mortgagor has a substantial time to redeem.

[elfkin477]

@Xema

Note that what you are describing amounts to the same thing as the bank buying the house at auction for $150,000, anticipating that it will appreciate.

Most banks are probably reluctant to get into the business of owning vacant (and perhaps occupied) property, with the various hassles and risks that entails. They instead prefer to be in the business of loaning money to homeowners or landlords who own that property.

There are lots of bank owned properties that aren’t on the market (for example, one down the street from me was foreclosed and vacated more than 18 months before it was put up for sale), so they’re not that reluctant. The explanation I was given was that they don’t want to force down prices in a city/town by putting them all on the market at once.