How delayed foreclosure response cost one millionaire his mansion

Despite the saying that home is where the heart is, home is often where people store much of their personal wealth. When you purchase a property and begin making payments on a mortgage, you slowly accrue equity. When you eventually sell the home, all of that equity can become money in your pocket.

You can also increase the equity in your home by increasing its overall value through repairs, updates and even additions. Every cent spent on your home could eventually increase your net worth. However, a lifetime’s worth of earning and saving could be at risk if you aren’t financially cautious.

It may only take a few months of missed payments to motivate your lender to foreclose on your home. Once foreclosure starts, you need to act quickly or risk losing everything you have invested in your home. That is a lesson that a millionaire in Virginia had to learn the hard way.

A tech executive lost his home after its value went down by more than half

On the banks of the majestic Potomac River stands a mansion of over 23,000 square feet that includes a bowling alley and 15-car garage, along with other amenities. The property at one time had an estimated value of about $24 million.

Unfortunately, the tech executive who owned the home had financial issues and saw his property at risk for foreclosure auction multiple times. After he fell behind on his mortgage, the lender eventually decided to foreclose. In a shocking twist, the foreclosure sale that resulted in a dramatic eviction saw the property command only $7.3 million, about a third of the previous value.

The lender would likely have preferred to keep getting payments on the higher value than to resell the property for a much lower price. If the owner had taken more timely steps to correct the issue, they may have been able to protect the investment made in their residence.

Bankruptcy can be a powerful tool for those facing foreclosure

Foreclosure can mean not just losing a place to live but also the loss of years of financial investments. Depending on your financial circumstances, you could qualify for one of several different kinds of personal bankruptcy.

All personal bankruptcy filings give you the benefit of an automatic stay that can temporarily stop a foreclosure from going through the courts. You might also be in a position to negotiate better mortgage terms with your lender, especially if you seek a Chapter 13 bankruptcy. Being assertive about responding to foreclosure attempts help you protect your home and the investment you’ve made in it.

 

https://www.washingtonpost.com/local/man-who-built-a-24-million-mansion-along-potomac-river-loses-his-battle-to-keep-it/2016/12/20/2f7966a6-bcaa-11e6-91ee-1adddfe36cbe_story.html?utm_term=.86cd6b5d6ab0&wpisrc=nl_lclheads&wpmm=1

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