Dec. 10, 2007
Dear George: In a foreclosure, why does the lender require an appraisal? Shouldn't the outstanding balance on the loan be the selling price?
Answer: The lender has to know if there's any equity in the property before foreclosure in order to determine a price for which it could sell. The lender doesn't have to bid at the loan amount. If the lender receives less than the outstanding loan, it can pursue a deficiency. Alternatively, there is nothing preventing a lender from obtaining a sale price that is equal to the market value of a property.
Dear George: Do senior citizens get better rates on loans?
Answer: I'm not aware of senior citizens being offered lower interest rates on mortgage loans than other borrowers. However, there are several programs that assist all Texans with downpayments and closing costs when purchasing a home. Check out the article "Downpayment assistance: There's lots of help for buyers," which outlines many of the programs available to Texas buyers.
E-mail a question to ask George & Chuck or fax it to 713-978-6684. The answers to questions in this column do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney.
