QUESTION
Can I have my name on the title to a new house if my current one is in foreclosure?
Asked on Feb 07th, 2013 on Foreclosures - Michigan
More details to this question:
My current house has been foreclosed; sheriff’s sale was several months ago. We are coming to the end of the redemption period, and must move soon. A relative is buying another (much cheaper) house for us. Will anything "bad" happen if my name is on the title to the new house?
7 ANSWERS
The lender on the foreclosed home may try to sue you for a deficiency arising from the first home. If so, a judgment would probably attach to your new home if the lender records it. I would wait until you see what happens on the foreclosure. Unless the lender will give you a waiver of deficiency, it has at least 6 months to sue you. I would ask the lender for a deficiency waiver. Also, when you get the new home make sure to record a homestead declaration.
Answered on Feb 12th, 2013 at 7:34 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Something is not right in the facts you state. The sheriff's sale occurs near the very end of the redemption period, and it is (usually) confirmed by the court a few weeks later. So your facts do not reflect the way things are done in Wisconsin. Regardless, there is no law keeping you for acquiring title to a house while a former one is being foreclosed on. There are other potential problems, though, such as possible vulnerability to an action by the foreclosing bank to get hold of your equity in the newly-acquired property. Consult a real estate lawyer.
Answered on Feb 08th, 2013 at 4:16 PM
Bankruptcy Attorney serving Overland Park, KS
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Wellman Law LLC
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There could be title issues if you ever attempt to sell the new house or refinance/get a loan against it. This would likely be relatively easily resolved between an attorney experienced in these matters and the Title Company. This is because the Title Company could initially see that foreclosure as a judgment against you that clouds title to other real estate. However, if the judgment is "in rem" only (only against your former home) this is something that should not cloud title. Or if your new home were your homestead I believe that even an "in personam" judgment would not attach.
Answered on Feb 08th, 2013 at 2:23 PM
Kevin J. Connolly
No. There is a risk, a remote one that the foreclosure suit might result in a "deficiency judgment" that the bank might try to collect from the new home. There are ways to prevent this but you should speak to an attorney. Too many details to cover in this format, but for one example, if you are alone on the existing NOTE then by taking title to the new house with your wife as tenants by the entirety, you would insulate the home from being lost due to enforcement of a deficiency judgment. Also, you're more likely to be hit by lightning than to end up on the receiving end of a deficiency judgment.
Answered on Feb 08th, 2013 at 2:22 PM
It would depend if you have other creditors or not. Also,If you had a non purchase money loan on the house, it was not wiped out by the foreclosure.
Answered on Feb 08th, 2013 at 2:22 PM
If you only have one mortgage on the foreclosed house, you should be ok. Your only concern with having your name on other property is that your first lender could potentially lien it (assuming it sold at sheriff's sale for less than the full balance of the mortgage). Most first mortgagors do NOT come after deficiencies. However, most second mortgage holders DO come after you. You likely have no worries but you should probably have a lawyer review your situation so you can be sure.
Answered on Feb 08th, 2013 at 2:21 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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The last is different with each state. You need to talk to an experienced real estate attorney licensed in the state where the foreclosed property is located.
Answered on Feb 08th, 2013 at 2:21 PM