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Exhaust all options before foreclosure

Q: I'm facing foreclosure. How long can I remain in my home?

A: Before the foreclosure takes place, talk to your lender — and not just a low-level loan officer but someone high in the company. See if you can work something out. Lenders don't want yet another foreclosure on their books. If no one buys your home at the foreclosure sale, the lender will be stuck with paying real estate taxes and insurance on the house.

You may also be eligible for relief under the big federal foreclosure relief act that was signed by President Bush in July. Your lender may allow you to refinance on terms you can afford.

If the house does go into foreclosure, attend the sale and see who buys the house. Technically, you have to move out when the house is sold. The buyer, whether an individual or the lender — may be willing to rent the house back to you. I know of many cases where the onetime owner simply waits for the new owner to begin eviction proceedings and then moves out.

Benny Kass can be reached at [email protected]

About those trees

Q: My neighbor recently planted trees, two of which are on my property. Where do I stand?

A: Have your property surveyed so you know exactly where your property line is. If your neighbor's trees are even 1 inch on your property, meet with him to discuss the situation.

If the trees are on your property, you have the absolute right to demand that they be removed. If you do not object to those trees, then perhaps you can reach an agreement that the neighbor will maintain the trees. And though it may be a very small amount of money, you may want to ask your neighbor to pay the real estate tax on that percentage of your property on which the trees stand.

Depending on your state law, as long as you will not injure anyone or cause any property damage, you should have the right to cut down the trees if they are on your property. That said, I don't think getting out there with a chain saw on Saturday morning and cutting them down is the way to reach an amicable agreement with your neighbor.

Buyer beware

Q: My mother planned to buy a foreclosed home from the bank and she arranged to have the house inspected. The heat and water had been shut down when the house went into foreclosure. The inspector documented in his report that he was unable to inspect those systems and suggested they be checked when service was restored. My mother went ahead and bought the house. When the water was turned back on, she discovered that one pipe was leaking and the heater was not working.

Who is responsible: the bank for not turning on the heat and water systems so everything could be inspected properly, or my mother for not insisting that the utilities be in working order before the inspection?

A: Sorry, but your mother will have to fix these problems at her expense. Every home buyer should have an independent home inspector thoroughly evaluate the house and provide a written report. Your purchase and sales contract must contain an "inspection contingency," which means that you have X number of days in which to have the property inspected. If you advise the seller that there are problems with the house within the time limit spelled out in the contract, the contract will either be null and void (and your earnest money deposit returned to you) or the seller will agree to make the necessary corrections (or give you a cash credit at settlement). This is true whether it's a new home, a resale or a foreclosure.

I prefer the cash credit. Home buyers should be able to oversee and sign off on the work they're going to have to live with. Or they may be planning to remodel the house anyway and the work the sellers just had done will be ripped out. Or a seller forced to pay for repairs may do the work on the cheap or hire an unlicensed contractor who may not do a good repair job.

Your mother's first mistake was to go to settlement without carefully inspecting the entire house. Her second mistake was failing to inspect the property the morning of the closing, at which time the heat and water should have been restored as a condition of closing. I advise all my home buyer clients to include the right to a "presettlement inspection" in the sales contract to make sure that the property is as it is supposed to be before closing. This inspection should take place the morning of the settlement, not the day before and never at night. This is your last chance to be sure the seller hasn't removed lighting fixtures, appliances or other items that are supposed to be included in the sale. It's also the time to make sure the owner has removed junk, if that was part of the sales agreement, and has not trashed the house.

Exhaust all options before foreclosure 09/05/08 [Last modified: Tuesday, November 2, 2010 3:51pm]
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