An aggressive price might prompt quick sale before foreclosure
Q. My wife and I have been served with foreclosure papers. I read your column and I know that I have seven months from when we were served to pay off the mortgage.
We have been speaking to a family friend for a few months about helping us out and staying in the house. She kept telling us not to worry and that we would work something out. A couple days ago, she told us some unexpected things have come up and she will not be able to help us.
The problem is we now only have about a month until our seven months runs out. People are telling us to put the house on the market, because we probably have some equity. But there is no way we are going to find a buyer and close in 30 days. Will the bank give us more time if we ask? Any other suggestions?
A. First, remember, the redemption period is the longer of seven months from the date both you and your wife were served or three months from the date a judgment for foreclosure was entered. Check the dates each one of you were served and the date the judgment was entered as it is possible you have longer than you think.
Second, yes, put the house on the market and price it aggressively. In the event you enter into a contract to sell your home any time before the sale, most lending institutions will extend the redemption period to accommodate your sale, especially if this is not a short sale. Most lenders would much prefer to extend the redemption period and cash out of the property than be stuck with another foreclosure.
Q. My mom is in a nursing home and will probably never return to her home. Mom's nursing home expenses are covered by an insurance policy she took out years ago.
I have two siblings that live out of state, so I am the one responsible for continually checking up on the house, mowing the lawn, shoveling the snow, etc. I also take care of the real estate taxes and insurance.
I would like to sell the house now and put the money in an account for mom's needs. Mom agrees but she wants all three kids to agree on whatever we do.
My siblings hate the idea. Part of it, I know, is that they hope mom will someday be able to return to the house. No one can bear the thought of never having a family gathering there again. But it's not going to happen and I'm the one doing all the work waiting for this event that is never going to occur.
I have a power of attorney mom signed years ago. I believe it gives me the right to sell the house. I hate to go against my siblings, but taking care of this house is getting to be too much. I would appreciate any help you could give me.
A. Read the power of attorney. It's possible your powers under the document may only be exercised in the event your mother is deemed mentally disabled.
Regardless, selling the property against your sibling's wishes is probably not a great idea, if for no other reason, maintaining family harmony. Your family is going through a difficult period with your mom in a nursing home and you don't need to aggravate the situation by creating a battle over selling the house.
Before making any decisions, I would speak to your mom's tax adviser to ensure there is not a tax or financial reason to sell or not sell the property. Mom would be entitled to a capital gain exclusion of $250,000 if she sold now (I am presuming she is not currently married). In the event there is a greater capital gain than that, it is quite possible your family would be better off not selling the home while mom was alive. There also may be issues involving paying for the nursing home expenses, though you do indicate her expenses are covered by insurance.
In the event there is no great benefit to selling or not selling now, I would suggest speaking to your siblings and telling them what you told me. Perhaps they would agree that upon the ultimate division of the house proceeds, you would be compensated for your work, maybe agreeing on a certain amount per month. This allows your siblings to maintain their hope of future family gatherings and you won't continue to feel like you're being taken advantage of.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine IL 60067, by e-mail to email@example.com or call (847) 359-8983.
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