Q: I have a home worth $850,000. My first mortgage is $650,000, and my second mortgage is about $160,000. The home was once worth $1.2 million. Unfortunately, I am unable to refinance because the appraised value is not there.
I tried to do a home modification. I was paying $500 per month on the second mortgage for 10 years, of which I never missed a payment. In addition, I never missed a payment on the first mortgage either. The lender will only give me two options: either pay $2,700 per month, which is paying the $160,000 off in five years, or they will start foreclosure proceedings.
I feel this is completely unacceptable, and I could really use your help.
A: I need more information. Are you in financial difficulty in which you cannot make the monthly payments, or are you just trying to get out from under a high mortgage loan?
If your situation is the latter, then I would wait it out a little. The economy is slowly improving and, hopefully, your home will gain in value.
On the other hand, if you are in financial trouble, you should immediately talk with a financial counselor. Numerous federal and state programs are available to assist homeowners who want to stay in their home but for many reasons cannot make the monthly payments. You should also talk to a high-ranking officer in your lender’s institution.
While the bank is threatening foreclosure, it has been my experience that most banks really don’t want to foreclose; often, they get stuck with the property and have to maintain it and pay the real estate tax as well as the home insurance premiums. I know, of course, that there are still a lot of foreclosures out there, but you may be able to persuade your lender to work out a better deal with you.
You should also find out what protections there are in your state when faced with foreclosure. Many states have made it very difficult, and time consuming, for a lender to foreclose, requiring such things are mediation or providing the borrower with alternatives to consider.
In the final analysis, you might want to consider filing for bankruptcy protection, which, if done right, will give you time to get back on your feet.
Q: My daughter’s car was damaged by a falling tree in a park owned by her town. Is the town liable for the damage? She was legally parked on the street next to the park.
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A: I cannot give you specific legal advice because state law differs on the question of tree liability. But from the cases I have seen — and have actually successfully represented a car owner with a similar situation — it is the duty of the local government to periodically inspect trees on government property to assure the safety of the public.
But litigating against the government is not easy. In my case, we filed a freedom of information request against the local government, seeking statistics on the number of tree inspections they made on the street where the tree had fallen. I was surprised that this information was even kept, but when we received it, we had proof that the particular tree had not been inspected in over three years. Based on this evidence, we reached an amicable settlement with the local government.
I would retain an attorney in your area, but watch your calendar. There are statutes of limitation in every state, whereby after a period of time, typically but not always three years, if you don’t file a lawsuit, you will lose your rights to file any claim for damages.
I assume your daughter filed a timely claim with her insurance company. They may take this over and save you the time, money and headache of having to deal with the problem.
Benny L. Kass is a practicing attorney in Washington and Maryland. No legal relationship is created by this column; [email protected].