QUESTION
Who is responsible for paying for home repairs in a foreclosure? How?
Asked on May 05th, 2015 on Bankruptcy - Michigan
More details to this question:
If a creditor is foreclosing on a house, does the creditor have to pay the grant loan back through the town for home repairs? Or is the owner/borrower responsible for the repayment of such a loan?
7 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If I read your question correctly, you're referring to a loan that you've already taken out and used to money to pay for home repairs. The way a foreclosure works is that the property is sold, the proceeds go to pay off the first mortgage, if there is anything left over it goes to pay the second mortgage, if there is still anything left over after all the liens are paid then the remaining money would go to the former owner. If there isn't enough to pay off all the liens, then the lenders would come after the former owner for the remainder of their loan.
Answered on May 07th, 2015 at 4:17 AM
Typically the foreclosing party will make the repairs. There are exceptions. For example, if the damage to the home was deliberate.
Answered on May 06th, 2015 at 12:10 PM
So as I understand it, you borrowed money from the local government to make home repairs and now are losing the home in foreclosure. If the house sells for more than the amount you owe on the first, the government, who holds a second mortgage, will get paid any difference, but not more than the total owed. If there isn't enough left to pay the first from the foreclosure sale, the second mortgage will die but only as to the property. You will still owe the government on this loan because you signed the loan papers.
Answered on May 05th, 2015 at 5:39 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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A proper answer to your question requires reading all the documents which you signed and reviewed when you got the grant. Without such a review, no lawyer can give you a professional opinion. Find a good real estate lawyer and pose the question to him or her. Good Luck.
Answered on May 05th, 2015 at 4:36 PM
Debt Collection Attorney serving Chicago, IL
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Edelman, Combs, Latturner & Goodwin, LLC
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If you signed a note, you are obligated, unless there is something in the note that relieves you of responsibility in the event of foreclosure.
Answered on May 05th, 2015 at 3:24 PM
Business Law Attorney serving White Plains, NY
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These issues depend on, among other things, the procedural juncture of the foreclosure action as well as the terms of the mortgage documents.
Answered on May 05th, 2015 at 3:21 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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It will depend on the terms of the loan but generally, I would guess, it would be you, the borrower.
Answered on May 05th, 2015 at 3:19 PM