Dear Benny: My husband died six months ago.
We own a house, and the first mortgage is in his name only, but the deed and our second mortgage are in both of our names.
My house is up for sale, but I haven’t received any contracts. When my husband died, I lost a large monthly payment that he was getting.
I am afraid the house will end up in foreclosure. Do I need a lawyer? What is the procedure to do something about this? My home is in an adult community. Do I have to keep paying the maintenance fee? — Evelyn
Dear Evelyn: I know that when I suggest that readers get a lawyer to assist them, some say that I am just trying to advertise legal services. That is far from the truth. I have personally assisted thousands of clients in my law practice and helped them out of difficult situations.
So, yes, you should get a lawyer.
You also should get a good real estate agent who understands market conditions in today’s economy.
There are a number of government programs that may be helpful to you. You should consider a short sale, which many lenders are willing to approve. This means that if and when you find a buyer, if the sales price is below the amount of your current mortgage, the lender may be willing to allow the sale to go through. You would not get any money from the sale but at least you would avoid the stigma of a foreclosure.
Other remedies include asking the lender to take back the property — this is called a “deed in lieu of foreclosure” — and filing for bankruptcy.
These are only a few suggestions. Your lawyers should be able to assist you based on the laws in your jurisdiction.
Should you pay the association’s maintenance fee? Legally, you are obligated to do so, although many association owners who are in your same situation opt not to make those payments.
I understand that you don’t want to throw good money after bad, but if you — and many other association owners — stop paying their assessments, your association will suffer and market values will go down even further. I cannot recommend that you stop making those association payments.
Dear Benny: I seem to have misplaced my HUD-1 form when we bought our house back in 1972. What can I do to obtain a copy and where? — Carol
Dear Carol: In case my readers do not know what a HUD-1 form is, let me explain.
In 1974, when the Real Estate Settlement Procedures Act became federal law, the Department of Housing and Urban Development was authorized to develop a standard settlement statement. That document is known as a HUD-1.
HUD revised the form effective Jan. 1, 2010, presumably to provide consumers more information about the settlement process and the costs they have to pay in order to buy their house.
So, don’t look for a HUD-1 for your 1972 purchase. That form was not in existence before 1974. You should just be looking for a simple settlement statement.
However, I suspect that you will never find it. The escrow (title) company that conducted your settlement is either out of business or has destroyed their old files.
If your original lender is still around, it may have your file, but based on the length of time that has passed, I doubt it.
My suggestion: Try to recreate your costs as best you can. Do you keep back checks? If so, that may assist you.
And do you really need that document? Usually, it is important to determine if you will have to pay any capital gains tax when you sell a house. Talk with your accountant about your situation. You may be eligible for the up-to $250,000 — or $500,000 if you are married and file a joint tax return — exclusion of gain and will not have to worry about the information on your settlement statement.
Benny Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to email@example.com.