TM Is In A Classic Strategic Default Conundrum, What To Do? What To Do?

GOT QUESTIONS?

Hi there,

I'm in the Bay Area of California (West Oakland, a low-moderate income  neighborhood, changing slowly, but centrally located & surrounded by well-established neighborhoods).  I bought my first and only home, a fixer upper, in August 2005 for $430K.  It's currently assessed, by the county, at $142K, although I seriously doubt it would even sell that high. I'm betting $125 max.  I had put $120K down initially, and have put in another $80K for rehabs. so far.  It needs another $85K or so, which I currently have in savings.  Moody's analysis predicts the market won't rebound til 2020 at the earliest for my area, but I need to sell at $510K at current investment just to break even, or $600K if I finish the work.  It'll be a long time, if we can reach that goal at all, if I am to take stock in Moody's analysis. (I'm 40).

I need to explore my financial options with regards to this house: finish the work and take a gamble on the future, or walk away from the house with a strategic default and lose $200K.  I don't qualify for a loan modification under current moderate income-level limits: my lender is Cal HFA (at the time that I bought it, I qualified for a 4.75% fixed rate loan in the moderate income category, but my income has since increased to slightly past the eligibility limits for loan modification under the anticipated extension of the Keeping Homes Affordable program.  Plus, I can afford my payments).  I don't qualify, that I'm aware of, for a short sale for the same reason: I can afford my payments.  But the question remains: is it worth it to finish fixing the house and take a chance at breaking even in the long haul? Or would I just be throwing good money after bad?

I'm trying to figure out who best to consult with in order to further explore this question, given all of the particulars of my situation. Would I consult with an accountant?  Are there accountants with expertise in real estate?  Is there some other professional I should consult with?

Any thoughts, leads, advice, etc. would be welcome...

thank you

GET ANSWERS…

Dear TM:

First of all thank you for writing to me.

The first question is to ask yourself what are you goals? How long do you want to keep your home? How long will it take for your property to increase by $475,000 so you can reach the $600,000 price point? You have a fixed rate loan, so over time your monthly payment will reduce principle. So if you plan to be in the house for the next 15 to 20 years then your principle will be reduced. By your 15th year, more of your monthly mortgage payment will be applied towards principle than interest. You can review an amortization table to determine how your monthly mortgage payment will be applied against interest and principle.

You need to ask yourself if an investment of $85,000 into the repair of your home will give you a better return than any other investment? What is the best use of your current savings? You are right, if you strategically default you will likely lose your initial $200,000 investment in your home.  

That being said let’s review the risks of strategic default. You need to understand your risks to make an intelligent decision.

The primary risks of a strategic default are:

1. Deficiency debt leading to a deficiency judgment. This includes a lender deciding to sue for the entire outstanding debt instead of filing a foreclosure action.
2. Lower credit score.
3. Loss of the home or property to a foreclosure sale.
4. Recently, Fannie Mae implemented a rule that bans a person from obtaining a Fannie Mae mortgage, if that person strategically defaults. The ban last for seven years. Furthermore, the United States Government may pass a law that bans a person from obtaining a government insured loan, if it is proven that a person strategically defaults. Read this  link to learn more.
5. Debt collections tactics, including mail, letters, personal visits to the property, phone calls to cell phone, work, and/or family members. Not all debt collection tactics are legal. You should become familiar with your state’s debt collection protection laws and the Fair Debt Collections Protections Act. Read this link to learn more.

My experience has established that most people who strategically default are most concerned about deficiency debt. Most people do not want to be chased down for more money by creditors or lenders.

Let’s go through deficiency debt issues carefully. A deficiency debt also known as debt deficiency arises when collateral that is used to secure a loan cannot satisfy the total amount due on the loan. The unsatisfied amount due on the loan is a deficiency debt. Read this link to learn more about deficiency debt defense.

You mentioned that your property is in California. California is a non-recourse/anti-deficiency state. That means a lender may not have the right to seek a deficiency judgment. Please read this link to learn more.

If a lender or creditor forgives the deficiency then you will not be exposed to a deficiency judgment. When a lender or creditor agrees (IN WRITING) to forgive a debt as opposed to seeking a deficiency judgment, then the forgiven debt may be considered income by your state taxing authority and the IRS. Under current Federal Law if a debt is forgiven on a primary residence then there is no tax due to the IRS. Read this link to learn more.

You have the right to request a principle reduction. You may not need to default to request a principle reduction. Contact the lender.

You can negotiate a deed-in-lieu. This is when you enter into a written agreement to give the property back to the bank. The key is to negotiate a full settlement of your total outstanding mortgage debt including fees and penalties in exchange for the deed to your property. A full settlement of your total outstanding mortgage debt eliminates a deficiency and tax liabilities. A partial settlement still leaves open the possibility of a deficiency judgment or forgiveness of the remaining balance.

You can negotiate a short sale. You may not have to be in default to negotiate a short sale. The key is proving to the lender that you are unable to sell the property without a short sale. The lender may request that you list the property for sale. However in your case, an appraisal or a broker’s opinion should be accepted as a substitute for listing the property.  You will need to speak to the lender.

Beware of the Turn In Your Financial Documents Trap. This happens when the lender’s representative asks you to turn in your financials via telephone or fax in order to see if you qualify for a loan workout, principle reduction, deed-in-lieu, or short sale. Before you agree to turn over your financial documents ask the lender to send you something in writing stating that they will seriously consider a work out option if you turn over your financials. The problem I have is this: What happens to your financial documents, if your lender refuses to negotiate a loan workout? Can the lender use this information against you? For example, can the lender use the information during a foreclosure action or during a lawsuit seeking a deficiency judgment?

So think carefully. You should focus on California’s non-recourse/anti-deficiency laws.

You should consult with an attorney regarding the legal risks of strategic default, especially regarding California’s non-recourse/anti-deficiency laws. You need to ensure that under California law you will not be exposed to a deficiency. You also need to consult with an accountant to ensure you will not have any tax related issues regarding a strategic default and the forgiveness of any debt.   

Please contact me with any further questions. Good luck.

Thank you.

A. A. Diji

BSE Wants To Walk Away From Two Investment Properties in Vegas

GOT QUESTION?

This question has to do with two properties I own in Las Vegas. Briefly , they are two townhomes in the same develpoment w/ mortgages by two different lenders. Both are intrest only ARM's due to adjust in 2012 and 2013. I've owned them since 2005 and they are currently worth 50% of what I paid. Principe balance on one is $204,000.00 and $172,000.00 on the other. I'm current on both and they are rented but with neg. cash flow. I sold my buisness in 2004 and all of the note payments from the sale of my buisness has gone into these two properties. When these mortgages adjust I most definately will not be able to afford them. My wife and I are both on the notes, she is currently employed and I work part time on a cash basis. We also own our home her in New York as well as a commercial property. The lenders won't talk to me until I miss at least three payments, I'm condisering walking away. What are the potential consequences? By the way I put down $50,000.00 on each of these properties.

Thanks for your help!

BSE

GET ANSWER…

Dear BSE:

Thank you for writing.

First of all, you and your wife are equally liable and equally responsible for the mortgage loan since you both signed the note. A lender or creditor will not differentiate between who signed the note first or last, as long as it has been signed by each party.

The primary risks of a strategic default are:

1. Deficiency debt leading to a deficiency judgment.
2. Lower credit score.
3. Loss of the home or property to a foreclosure sale.
4. Recently, Fannie Mae implemented a rule that bans a person from
obtaining a Fannie Mae mortgage, if that person strategically defaults. The ban last for seven years. Furthermore, the United States Government may pass a law that bans a person from obtaining a government insured loan, if it is proven that a person strategically defaults. Read this link to learn more.
5. Debt collections tactics, including mail, letters, personal visits to the
property, phone calls to cell phone, work, and/or family members. Not all debt collection tactics are legal. You should become familiar with your state’s debt collection protection laws and the Fair Debt Collections Protections Act. Read this link to learn more.

My experience has established that most people who strategically default are most concerned about deficiency debt. Most people do not want to be chased down for more money by creditors or lenders.

Let’s go through deficiency debt issues carefully. A deficiency debt also known as debt deficiency arises when collateral that is used to secure a loan cannot satisfy the total amount due on the loan. The unsatisfied amount due on the loan is a deficiency debt.

A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note or mortgage loan, in full. A deficiency judgment can be obtained when there is a deficiency debt.

You mentioned that your properties are in Las Vegas, Nevada. Nevada is a recourse state. That means a lender has the right to seek a deficiency judgment. A lender must file for a deficiency judgment in a certain period of time after a foreclosure sale. Please read this link to learn more.

If a lender or creditor forgives the deficiency then you will not be exposed to a deficiency judgment. When a lender or creditor agrees (IN WRITING) to forgive a debt as opposed to seeking a deficiency judgment, then the forgiven debt may be considered income by your state taxing authority and the IRS. Forgiven debt is income.

Under current Federal Law if a debt is forgiven on a primary residence then there is no tax due to the IRS. However, your properties are investment properties so it is unlikely you can benefit from the rule.

There are ways to minimize your risks of a deficiency judgment:

You can negotiate a principle reduction. This is when a lender or creditor agrees to reduce the principle balance of a loan. You can ask the lender to forgive the difference (IN WRITING) as part of the negotiation.

You can negotiate a deed-in-lieu. This is when you enter into a written agreement to give the property back to the bank. The key is to negotiate a full settlement of your total outstanding mortgage debt including fees and penalties in exchange for the deed to your property. A full settlement of your total outstanding mortgage debt eliminates a deficiency and tax liabilities. A partial settlement still leaves open the possibility of a deficiency judgment or forgiveness of the remaining balance.

You can negotiate a short sale. This is when a lender let’s you sell your property for an amount less than what is owed on the mortgage. Essentially your lender may be willing to accept less than the full amount due on a mortgage. If you owe the lender $400,000 then the lender may agree to let you sell the property for $350,000.

In all these cases you must get the lender to agree to forgive the deficiency.

Beware of the Turn In Your Financial Documents Trap. This happens when the lender’s representative asks you to turn in your financials via telephone or fax in order to see if you qualify for a loan workout, principle reduction, deed-in-lieu, or short sale. Before you agree to turn over your financial documents ask the lender to send you something in writing stating that they will seriously consider a work out option if you turn over your financials. Or ask the lender to direct you to their website regarding their loan workout processing rules. The problem I have is this: What happens to your financial documents, if your lender refuses to negotiate a loan workout? Can the lender use this information against you? For example, can the lender use the information during a foreclosure action or during a lawsuit seeking a deficiency judgment? In order to collect on a properly obtained deficiency judgment, the creditor or lender must locate your bank account, or locate your investment account or locate your place of employment or locate any other asset that has value. I don’t think anyone wants to turn over their financial documents to be used in any way to take their money.

If you do decide to turn over financial documents to the creditor or lender, then cross out all of the account numbers. If the creditor or lender refuses to work with you after you have turned over your financial documents then immediately move all of your money and your investments to another financial institution. Only turn over what the lender asks for nothing more.

A creditor or a lender has the right to garnish wages if it properly and legally obtains a deficiency judgment in a court of law against a person who entered into a legal loan agreement with the creditor or lender. Your wife could be exposed to wage garnishment if the creditor or lender successfully obtains a deficiency judgment against her.

Keep in mind that even if a creditor or lender successfully obtains a deficiency judgment, it does not mean all is lost. You can negotiate a settlement with the creditor or lender. The creditor or lender may take 50% or less than what is owed instead of spending time in court. Also keep in mind to NEVER LET A LAWSUIT FOR A DEFICIENCY JUDGMENT GO UNDEFENDED. NEVER IGNORE THIS TYPE OF LAWSUIT. The simple reason is that you may stop the creditor or lender from getting a judgment or you may be able to use your defense to this lawsuit as a means to negotiate a settlement.

A critical decision is how to protect your assets. There are various tools and strategies that can be employed to legally protect or hide your assets from a creditor. Keep in mind there is a rule called fraudulent conveyance. Essentially, a fraudulent conveyance is when a debtor transfers their assets in a way to prevent a creditor from collecting on a debt. There are specific rules regarding fraudulent conveyance, so this should not prevent you from properly protecting your assets.

Unfortunately, you will lose your initial $50,000 investment. However, you should speak to an accountant to determine what happened to your cash investment if the property is sold at a loss.

You should seriously consider working with a qualified real estate broker, attorney and/or accountant in order to understand your specific risks.

You have much to consider. I am confident you are on the right track.

Please feel free to write me at anytime.

Sincerely,

Augustine A. Diji

KL Wants To Strategically Default In Colorado - Can The Bank Come After Him?

GOT QUESTIONS?

Hi,

I am considering strategic default and am wondering how Colorado state law will effect strategic default within CO. Can the bank come after the debtor for the balance?
Thanks,

KL

GET ANSWERS…

KL

Thanks for writing.

You are essentially asking is Colorado is a recourse or non-recourse state. It is my understanding that Colorado is a recourse state therefore a lender may have the right to collect on the unpaid mortgage balance after your property is sold.

Read the following link to learn about debt deficiency, forgiveness, and obligations and the link on recourse and non-recourse states.

I advise you to speak with a legal professional that is familiar with Colorado’s foreclosure laws, debt laws, deficiency laws, recourse laws, and collection laws.

Thank you.

Augustine A. Diji

SU Needs A Reputable Professional To Stop The Loss In Savings

GOT QUESTIONS?

Hello,

I don't even know who to turn to for advise on these matters. Do I need an attorney, an accountant or a mortgage advisor? And how do I find a reputable one?

I lost my job 13 months ago and decided to take most of my savings and put it into a business with my new husband. My house has been on the market for 8 months and I am hemorrhaging $2500 from my savings each month to keep up with the payments.

I am down to my last $10,000 in savings and I really don't want to keep throwing my money into a black hole. The house still has a small amount of equity in it, about $10,000

The house is in my name only, but I bought the business jointly with my husband. What are my options? Can the bank come after my business? The business is not profitable at this time due to start up costs. My husband is already using his 401k to fund the business.

Any advise appreciated.

Thanks, SU

GET ANSWERS…

Dear SU:

You are at a critical juncture. In a short period of time you will spend all of your savings. Your husband is depleting his 401k.

It is easy to tell you to stop wasting all of your savings on mortgage payments. However, it’s just not that easy.

Please consider the following:

A bank or creditor has the right to place a lien on your business asset if it obtains a court ordered personal judgment against you.

This assumes that the bank can prove you owe it money. The only instance in which you would owe the bank money is in the case of a deficiency. A deficiency debt is the difference between what the bank collects after the sale of your property and the balance of the mortgage loan (including fees, late penalties, legal fees, escrows, and unpaid interest.). A deficiency means the lender does not collect the full amount due on a mortgage loan. A deficiency debt can give rise to two different scenarios 1.) a deficiency judgment or 2.) debt forgiveness. A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note or mortgage loan, in full. This takes a time in court. Also, you have the right to defend yourself. I advise you to speak with a legal professional in order to understand the legal process.

In the case of debt forgiveness, when a debt is forgiven it can be viewed as a taxable event by the IRS and your state taxing authority. Forgiven debt is income. Please click this link to learn more about deficiency obligations, deficiency, and forgiveness.

Certain states do not allow lenders the right to obtain a deficiency judgment. This is called a non-recourse state. Please click this link to learn more about non-recourse and recourse states.

The following are the primary risks of a strategic default:

1. You will have a deficiency debt.
2. Lower credit score.
3. Loss of the home or property to a foreclosure sale.
4. Recently, Fannie Mae implemented a rule that bans a person from obtaining a Fannie Mae mortgage, if that person strategically defaults. The ban last for seven years. Furthermore, the United States Government may pass a law that bans a person from obtaining a government insured loan, if that person strategically defaults. Please click this link to learn more.
5. Debt collections tactics, including mail, letters, personal visits to the property, phone calls to cell phone, work, and/or family members. Not all debt collection tactics are legal. You should become familiar with your state’s debt collection protection laws and the Fair Debt Collections Protections Act.

You should utilize the services of a legal professional and a financial professional. Your goal is to find a professional with experience in your type of matter. You can do a search online to learn more about a professional. You can also ask for a meeting to evaluate them. Furthermore, a local professional association may be able to refer you to a reputable professional.

You need to understand your risks. Your goal is to make a decision that will not expose you to any deficiency to the lender. You want to walk away without owing the lender another dime out of pocket.

I hope this helps. Feel free to write back.

Thanks.

Augustine A. Diji

PL Wants To Know If It's To Early To Strategically Default

GOT QUESTIONS?

Hello,

My wife and I bought a townhouse/condo in 2006 for $229K and now it's work about 210K. My parents are struggling to pay their mortgage and would welcome my wife and I moving into their house, adding an in law apartment to the place and taking over their mortgage (not on paper yet, just making their payments via a side agreement). I'm just wondering that even though we can pay our current mortgage, should I try to sell the condo or just do a strategic default. My parents house is the house we plan to live in for the remainder of our lives, so looking to buy another house in the future isn't in our plans. What do you think?

PL

GET ANSWERS…

PL

Thank you for writing me.

I have listed below your primary risks if you decide to strategically default:

1. You will have a deficiency debt. A deficiency debt can give rise to a deficiency judgment or debt forgiveness. A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note or mortgage loan, in full. If the debt is forgiven it can viewed as a taxable event by the IRS and your state taxing authority. Forgiven debt is income. Please click this link to learn more.
2. Lower credit score.
3. Loss of the home or property to a foreclosure sale.
4. Recently, Fannie Mae implemented a rule that bans a person from obtaining a Fannie Mae mortgage, if that person strategically defaults. The ban last for seven years. Furthermore, the United States Government may pass a law that bans a person from obtaining a government insured loan, if that person strategically defaults. Please click this link to learn more.
5. Debt collections tactics, including mail, letters, personal visits to the property, phone calls to cell phone, work, and/or family members. Not all debt collection tactics are legal. You should become familiar with your state’s debt collection protection laws and the Fair Debt Collections Protections Act.

The question you should ask yourself is this: How much are we willing to come out of pocket to sell the property without facing any of the strategic default risks?

Is it worth paying $10,000 or $20,000 or $30,000 to eliminate any of the strategic default risks? Can you sell it on your own without paying a real estate broker fee thereby saving on your expenses?

Do you know what a short sale is? Have you explored that option? Will the bank be willing to lower your principle so you can sell the property at cost with no out of pocket, especially since the difference between the value and the mortgage balance is not that great? Will the bank be willing to agree to a principle reduction?

A short sale occurs when a lender enters into a written agreement to let you sell your property for an amount less than what is owed on the mortgage. Essentially your lender may be willing to accept less than the full amount due on a mortgage. If you owe the lender $400,000 then the lender may agree to let you sell the property for $350,000.

Do you know what a deed in lieu of foreclosure is? Have you explored that option?

A deed-in-lieu is when you enter into a written agreement to give the property back to the bank. The key is to negotiate a full settlement of your total outstanding mortgage debt including fees and penalties in exchange for the deed to your property. A full settlement of your total outstanding mortgage debt eliminates a deficiency and tax liabilities. A partial settlement still leaves open the possibility of a deficiency judgment or forgiveness of the remaining balance.

My advice is to first try to sell the property at either an affordable out of pocket cost or ask the lender for a principle reduction so you can sell at cost or utilize a short sale or offer to give the property back to the lender through a deed-in-lieu of foreclosure.

It’s a little early to strategically default and completely walk away from your property without exploring other options. Just make sure that if decided to work with a qualified professional that person knows what they are doing.

Please contact me with any further questions.

Thank you.

Augustine Diji

GR Wants To Walk Away To Move Closer To His Parents

GOT QUESTIONS?

Hello Mr. Diji,

First off, I want to tell you how great your website is, as I started to ponder the idea of a strategic default I stumbled across your site and it has been a wealth of information. So thank you for all the hard work you put into it.

Now I would like to tell you my situation and ask for your advice. I purchased my home in Connecticut in April 2005 for $245k. I put $15k down and had an original mortgage of $230k. In mid 2006 the house had appreciated a bit so I took out a home equity loan of $25k to pay off some high interest credit cards (I thought I was being smart). About a year and a half ago I refinanced my mortgage and home equity loan into one new mortgage, that mortgage now stands at $247k. My wife and I just had our first child and would like to move closer to my parents (a few towns over in CT) so we decided to call a realtor and see what the current value of the house is. To our dismay, she valued the house at about $200k. We desperately want to get out of the town we are in and closer to my parents for several reasons (baby sitting / free daycare, better school system). My current mortgage payment is $1900, and based on my estimate, if I continued to pay that every month, it would take over 10 years to see any equity and be able to sell. We can’t wait that long and we don’t have the savings to sell at a loss and make up the difference with the bank. We are going to attempt to rent the place but I don’t have high hopes for that. I don’t see another way out besides a strategic default. Since I have been making the payments and can afford them, I don’t see the bank qualifying me for a short sale or a deed in lieu of. The good thing is that the mortgage is only in my name, so we would be able to get a new mortgage in my wife’s name. And as far as I know, CT is a non-recourse state. Any advice you have would be greatly appreciated.

GET ANSWERS...

Dear GR:

I appreciate your words.

First things first. Let’s be sure if Connecticut is a non-recourse state. I strongly recommend that you speak to a qualified professional, such as an attorney. Deficiency rules are governed under §49-14 General Statutes of Connecticut. An appraisal process and hearing must be held on any application for a deficiency judgment. Please click this link so you can begin to familiarize yourself with the deficiency rules in Connecticut.

Let’s assume that Connecticut is a recourse state. You would then be exposed to a deficiency judgment. A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note or mortgage loan, in full.

Please read this link to learn more about deficiency judgments, debt obligations, and debt forgiveness.

Read this link about Recourse and Non-Recourse states:

There is a lot of truth when you say a bank is unwilling to work with anyone who pays their mortgage on time. Even if the property is upside down or the mortgage payments are “sucking” all of a person’s life savings. That said, you want to limit any exposure to a deficiency judgment.

A lender may allow a short sale even if you are current. I would contact your lender regarding a short sale. It is not likely a lender will agree to a deed-in-lieu unless you default on payments. You should ask the lender.

Beware of the Turn In Your Documents Trap. This happens when the lender’s representative asks you to turn in your financials via telephone or fax in order to see if you qualify for a loan workout, deed-in-lieu, or short sale. Before you do that ask the lender to send you something in writing stating that they will consider a work out option if you turn over your financials. Or ask the lender to direct you to their website regarding their processing rules. The problem I have is this: If, after you turn in your documents the lender does not agree to a workout, what happens to those documents? Can the lender use the information to during a foreclosure action or during a lawsuit seeking a deficiency judgment? I don’t think anyone wants to turn over their financial documents to be used against them.

While you are considering this you should probably move forward to get the new house. Even though your wife’s credit will not be impacted by your current property, you will both be emotionally impacted dealing with your current property situation. Once you have secured a new home, you can immediately implement your strategic default strategy. If you decided to rent instead of buy then your credit may be a factor. It’s best to take advantage of your good credit prior to any decision to strategically default.

Obviously, the key to renting your home is based upon how much the rental payment will cover the home’s expenses. Are you willing to cover the monthly short fall in order to preserve your credit? Is your credit score important to you? This is critical because experience has shown that most people who decided to strategically default are less concerned about their credit. If you understand that you must default to get a deed-in-lieu or short sale then it is something to seriously consider.

Remember that if you decide to give the property back to the bank make sure that it is in exchange for the complete and full satisfaction of all of the debt that is owed to the bank. This will eliminate any deficiency judgment risk. The key is to get any agreement with the bank in writing. If the bank is unwilling to accept the property for full satisfaction of the entire mortgage debt then demand that the bank forgives the balance. Normally, forgiven debt is taxable, however federal law exempts homeowners from any tax liability on forgiven debt under certain conditions including if it’s the homeowner’s primary residence. There are other factors which you can read about in my debt obligations, deficiency, forgiveness article.

It’s a careful balancing act. I can appreciate your reluctance to put money into a worthless asset that has very little chance of having any value. Who wants to be an economic slave to a home that simply enriches the bank and depletes savings.

If you have any further questions please feel free to contact me.

Thank you.

Augustine A. Diji

LB Wants To Know What Can Be Taken From Home When Walking Away

GOT QUESTION?

Hello,

First of all, thank you for your website.

My husband and I are strategically defaulting on our home. When we bought the home, part of the negotiation with the builder was to have a fridge, a/c unit and central vac thrown in. I'm pretty sure I can't take the A/C unit, as it's probably considered a "permanent fixture". But could I take the central vac unit and the fridge? What are the chances of the lender looking at the original sale contract to see if these were included?

If you cannot answer for legal reason I understand completely. Do you have a good reference for a real estate lawyer that I could speak to on the phone? I am having trouble finding a good one in our little town (Bend, Oregon).

Thanks so much!
LB

GET ANSWER…

Dear LB:

The answer can be found in your loan documents. Normally a lender has some form of a lien on all of the fixtures and mechanicals in the home. As you correctly noted what is considered a permanent fixture for bank purposes.

I am not sure the difference between the fridge, a/c unit and central vac unit. Normally when people move they take the appliances.

The real questions is what kind of risk are you willing to take?

I wish I could help you more. I do not have any references. Perhaps you can contact the local bar association or a local non-profit legal association.

Feel free to contact me at anytime.

Thank you.

Augustine A. Diji