What Happens To Pets After Foreclosure?

It’s hard to escape it – the economy is in the drain, the job market is not improving and foreclosures have reached an all-time high. Everyone is feeling the pinch, and none more than the multitude of animals that are being affected. Pet foreclosure victims are on the rise and rescue organizations are at their breaking points.  

Recently in the state of Tennessee a dog was found wandering the streets after his owner abandoned him due to home foreclosure.  He had been on his own so long that most of his hair was gone and his skin was infested with fleas.  Apparently, most local people simply wanted him out of the neighborhood and threw rocks and sticks at the poor dog.  Thankfully, the owner of Happy Endings animal rescue found him and after several months of treatment, he is healthy and ready to be adopted.

Fortunately, this former pet was at least turned out; many pets are being found dead or nearly dead locked in foreclosed homes.  No one denies that these are tough economic times for everyone; however leaving a defenseless animal on their own is not only irresponsible it is reprehensible.  Dogs, cats, and exotic pets are being left to fend for themselves in record numbers.  It is sad when people are forced from their homes but the fact remains when we take on responsibility for an animal that responsibility does not end.

People have the unique ability to think and reason, and when a pet owner sees that there is even a remote possibility they will no longer be able to care for their pet they should immediately begin searching for alternate care.  Let us face it foreclosures take time and in that time pet owners must find a way to make arrangements for the most vulnerable members of the household.

There are several steps people can take besides abandoning their pets.  When a person knows they are in trouble here are a few steps they can take:

• Call every friend

• Call all family members

• Place a pet on a waiting list at an animal rescue

• Take out an ad in the paper, these are usually free

• Put an ad online; Craig’s list, online newspapers, rescue organizations

Bottom line, there is no excuse for leaving an animal to fend for itself.  Not only is this cruel but it could create dangerous situations both for the animal and the community at large.

While most people cannot afford to take in every abandoned animal, many people could take in one.  Even if you are not in a position to take a pet into your home the next time you go shopping pick up a bag of pet food for your local animal shelter.  When everyone does a little, we can get a lot done and, right now, the pet foreclosure crisis is at a level that is going to require everyone to help.

TIPS FOR BUYING ANOTHER HOME BEFORE YOURS GOES INTO FORECLOSURE

 If you are considering purchasing another home then letting your present home go into foreclosure here are some tips that will save you trouble later down the line as well as help the transaction run smoothly.

1. You need an excellent lender who can structure your new home loan properly; after all there will be questions by the new lender.

2. You need an excellent real estate agent who knows how to structure this deal. Your real estate agent also needs to know how to find the right home. This may seem strange but not all homes will help the transaction and some actually will hurt your chances of qualifying.

3. There are no longer 100% loans so you will need a down payment. If you don’t have a down payment there are other alternatives but again your agent must be aware of these other options and how to implement them.

4. Once your real estate agent has located a likely home you’ll have to qualify for a new mortgage, so you can’t have any mortgage lates and you’ll have to have sufficient income to qualify for your existing mortgage and the new one. This is where a savvy lender is most important.

Many people are concerned with the ramifications of the foreclosure. Can the foreclosed lender sue for the difference? Can he attach my new home? And what about the IRS? These questions are whirling around in everyone’s head as they consider this method so let me help you with the answers.

1. Can the original lender sue me for the difference between what my home is worth and what I owe on a foreclosure in California?

California is a non deficiency state which means if you are foreclosed on and the mortgage company sells using a trustee sale which is the most common in California, then the lender has no recourse after the sale. But you must have the original loan you bought your home with. This is called the Purchase Money Loan. You can have a first and a second but the second should not be a HELOC as this is considered a line of credit and is viewed differently than a mortgage.

2. Will the IRS tax me on the difference between what the home sells for and what is owed?

If you have lived in your home for two years or more and considered it your primary residence then you have no capital gains responsibility for amounts $250,000 and under for single people and $500,000 and under for married couples. If you have not lived in you home for two years yet, there are other alternatives and a tax professional should be consulted before you begin this process.

Thanks to Steve Shoen of Alain Pinel Realtors for sharing this article with my readers.