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Foreclosure: Understanding garnishing of wages and accounts.

One of the more common fears among homeowners facing foreclosure is that the bank will suddenly start garnishing their wages in order to pay back the loan. With how far behind some homeowners fall, this fear can result in the anticipation of their not having enough money to pay the bills, keep the lights on, or feed their children. Especially if the income situation has deteriorated quite a bit, there may just not be enough money to pay the mortgage at this point.

However, the good news is that banks can not garnish a homeowner’s wages during the foreclosure process. The very simple reason for this is that the real estate is collateral for the loan — no other assets or future income source is pledged. If a car loan goes into default, the car is repossessed first; same with a mortgage in default: the bank can only take back the collateral that is pledged on the loan and there is no recourse to any other asset or income source.

Thus, the bank will have to take the property all the way through the foreclosure and have the court order it to be sold at a county sheriff sale. This auction is the legal mechanism by which the bank is allowed to attempt to recover the amount it is owed on the loan. If the sheriff sale pays off the mortgage in full, there is nothing further to collect.

If the property does not sell for enough to pay the loan off completely, some states allow mortgage companies to sue for a deficiency judgment after the foreclosure. Again, not all states allow this under the foreclosure laws, but it would give banks the right to garnish wages after the foreclosure, if they decide to sue for the judgment. But again, this comes only after the sheriff sale, and there would be no wage garnishment during the foreclosure process itself.

Banks rarely, if ever, sue former clients for deficiency judgments, though, because they know foreclosure victims do not have a lot of extra cash to pay down another judgment after losing their homes. It would take the bank too much time and money to sue again, when they did not collect very much on their original foreclosure lawsuit.

Lenders, of course, do nothing to dissuade homeowners from having the fear of wage garnishment. In fact, being sued after foreclosure, and the threat of losing their job, income, or other assets is often used by customer service representatives of mortgage companies to compel homeowners to keep making payments, even if they can not afford to do so. But foreclosure victims do not have to fear that the bank will come after their income during the foreclosure, and will not have to worry about the possibility even after losing the home.

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Obama: A new beginning (Time to look at self)

Jesse Jackson, Colin Powell, my mother and countless others around the world had the same sense of accomplishment, pride and overall acceptance at 10pm CST once it was official that Barrack Obama was named the 44th president of the United States.

Obamas victory was a victory for America. Not because of the majority vote but because of it’s significance. His winning the election signifies the country is moving well past the hate filled days of slavery, white pride and power. It instead lays the foundation for us to stick together and to know that we can and will prevail in the face of adversity.

My only regret of it all is that my grandfather didn’t make it 3 extra months in order to celebrate in the moment. I can imagine him now, tearing up and snotting with his tissue in hand while showing admiration for something he thought he’d never see in his lifetime.

America, we have a chance to do something special here. Barack preaches personal responsibility for all. Some think he’s their savior for their financial woes while forgetting that it was their bad spending and debt habits that got them there in the first place.

THAT’S RIGHT! It’s time for YOU and ME to become personally responsible for our actions. By doing so, first we must educate ourselves. We must know that prime mortgages are a precursor to failure. We must know that, “keeping up with the Jones” will have us as stressed as them.

So before looking for a handout with foreclosure help or jobless claim help, think about what got you there in the first place. It wasn’t Obama, IT WAS YOU!

Prime lending? You have to educate yourself instead of getting caught in the NOW moment.

Jobless? (again) You have to educate yourself instead of looking for someone to magically pick you out of a lineup in order to secure employment.

Of course there’s circumstances that go beyond this article where things aren’t so pronounced but then again, maybe they are. Maybe if we’d take personal responsibility those unpronounced things may not happen to us also.

Posted in Inspirational, education, goals, purchases | 1 Comment »