- The Washington Times - Wednesday, March 29, 2006

People do lose property through foreclosure or repossession. Many rags-to-riches seekers pursue the quick buck through foreclosure sales.

But foreclosure is only one of several ways homeowners or investors can lose property. Here are six different ways to lose your home.

• Don’t pay your mortgage. Generally, quit paying your mortgage and you’ll end up getting past due notices, followed by foreclosure proceedings notices and then a visit from the sheriff’s office to help you remove all your property from the household.

There might appear to be a lot of foreclosures out there, but the Mortgage Bankers Association reports that less than 1 percent of mortgages in 2005 went into foreclosure. That’s down 12 points from the year before. However, the number of mortgagees in default rose during the last reporting quarter to 4.70 percent.

The increase comes as no surprise to the group’s chief economist, Doug Duncan. “We have been expecting an up-tick in delinquencies due to a number of factors: the seasoning of the loan portfolio, the increased shares of the portfolio that are ARMs and subprime mortgages, as well as the elevated level of energy prices and rising interest rates,” he says in comments posted on the group’s Web site (www.mbaa.org.)

• Don’t pay your taxes. For homeowners who pay their own taxes — that is, they are not paid through a mortgage service provider — a tax sale could be in their future if they fail to pay taxes on the property. Although most tax sales are through local governments, state and federal revenue agencies can confiscate real estate for not paying taxes.

If this happens, it’s not as simple as just paying the back taxes and getting your property back. For some, it includes also paying penalties and interest. It can amount to a lot of money.

If your local taxing jurisdiction is anything like mine here in Fairfax County, then the confiscation of your home is a last resort. First, they will have tried various other methods of tax collection — garnishing wages, seizing bank accounts, booting and towing your car — before putting your house on the auction block.

• File bankruptcy. In the past, filing bankruptcy usually gave the homeowner some protection from losing his home to creditors. With the revamped bankruptcy laws passed last year, creditors might now have the upper hand in bankruptcy situations, says Herbert Addison, co-author of “How to Save Your Home.” He is a certified housing counselor who contends that while the new law allows for 180 days for the consumer to work out payment plans with the creditor, it does not stop the foreclosure process, which could be a shorter period of time than the payment workout plan. Check out the details on the Web (www.ezinearticles.com).

• Fail to pay other debts besides mortgage. Creditors are in business for one thing — to make money. Consumers pay interest and fees when they borrow. If the consumer fails to pay off those loans, creditors can go after assets to satisfy the debts. Your house could be one of those assets.

• Fail to pay homeowners’ association fees. If you get into an argument with your homeowners’ association (HOA), withholding the homeowners’ fees paid each month should not be one of your strategies. HOAs can also auction your house to satisfy past-due HOA fees.

• Take part in illegal activity. The American Civil Liberties Union contends that 80 percent of homeowners who have had property forfeited by the federal, state or local government have never been convicted of a crime. To seize property for illicit activity, law enforcement officials only need to have probable cause that the homeowner either used the property in committing a crime or purchased the house through illegally obtained funds.

M. Anthony Carr has written about real estate since 1989. Post questions and comments at his Web log (https://commonsenserealestate.blogspot.com).c

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