whoisjohngalt
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Post by whoisjohngalt on Mar 30, 2015 8:02:55 GMT -5
I know that rules might vary by state, but may be someone can give me some general info.
If there is a partial taking (just a small piece of land to expand a road), what happens with the mortgage on the house.
The way I am thinking, bank is loosing part of its collateral, right? And if you have a 30yr fixed mortgage, bank is not allowed to change your terms. IF that's the case, why would the bank be asking for appraisal from a home owner? Shouldn't the bank be dealing with the state?
What am I missing here?
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tractor
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Post by tractor on Mar 30, 2015 8:28:15 GMT -5
I might be slightly wrong, but in a typical eminent domain case, the land is forcibly purchased by the taker. So, while the property is taken, the current owner is paid the fair market value for the property (as determined by the courts). So the bank would want to get paid the $ since they hold title to it as collateral on the loan, which is being reduced by the land taken. I know I didn't word this well, but it would be the same as selling a piece of property split off a larger parcel that still carried a mortgage. The bank would get the money from the sale as a percentage of lost collateral.
What you might be missing is money still exchanges hands in an eminent domain case, you just have an unwilling seller.
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justme
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Post by justme on Mar 30, 2015 8:51:12 GMT -5
It depends how much they're taking. Typically the first x feet of your property are part of an easement (I think that's the right word) that the city/whatever can take to use for roads or sidewalks. Sometimes they let you buy that property.
Like our family cottage had it for the first 60ft of waterfront (technically for a road lol), which would have sucked because all but the last foot of the cottage was within that space. They let us buy it though.
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Bonny
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Post by Bonny on Mar 30, 2015 10:01:33 GMT -5
I might be slightly wrong, but in a typical eminent domain case, the land is forcibly purchased by the taker. So, while the property is taken, the current owner is paid the fair market value for the property (as determined by the courts). So the bank would want to get paid the $ since they hold title to it as collateral on the loan, which is being reduced by the land taken. I know I didn't word this well, but it would be the same as selling a piece of property split off a larger parcel that still carried a mortgage. The bank would get the money from the sale as a percentage of lost collateral. What you might be missing is money still exchanges hands in an eminent domain case, you just have an unwilling seller. You're right. It's called a "partial take" and usually what happens is the bank will do a "partial release" based on the %. If you look at your mortgage docs buried in the fine print is a section labeled "eminent domain".
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whoisjohngalt
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Post by whoisjohngalt on Mar 30, 2015 16:15:47 GMT -5
Bonny - but does a bank has a right to demand a home owner to get an appraisal? One one hand I can see why the bank would have that right, since their contract with the homeowner, but on another - it's the state that taking the property.
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whoisjohngalt
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Post by whoisjohngalt on Mar 30, 2015 16:17:06 GMT -5
I might be slightly wrong, but in a typical eminent domain case, the land is forcibly purchased by the taker. So, while the property is taken, the current owner is paid the fair market value for the property (as determined by the courts). So the bank would want to get paid the $ since they hold title to it as collateral on the loan, which is being reduced by the land taken. I know I didn't word this well, but it would be the same as selling a piece of property split off a larger parcel that still carried a mortgage. The bank would get the money from the sale as a percentage of lost collateral. What you might be missing is money still exchanges hands in an eminent domain case, you just have an unwilling seller. That's exactly how i understand it. I am just curious as to what happens if the bank thinks they are not getting enough $$$. Will they be going after the homeowner for the difference? Or after the state?
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Bonny
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Post by Bonny on Mar 30, 2015 16:21:27 GMT -5
Bonny - but does a bank has a right to demand a home owner to get an appraisal? One one hand I can see why the bank would have that right, since their contract with the homeowner, but on another - it's the state that taking the property. You would have to read the fine print in the mortgage and I'd say it depends on how much money we're talking about. In the cases that I was involved with the property owner always got their own appraisal to ensure they were getting enough money from the governmental entity. I suppose if it's a small take and the bank seems stuck on it the property owner could request the public agency cover the cost of an appraisal for the bank. It's certainly worth a try.
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whoisjohngalt
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Post by whoisjohngalt on Mar 30, 2015 16:37:36 GMT -5
Got it, thank you
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Deleted
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Post by Deleted on Apr 1, 2015 10:57:12 GMT -5
Happy to live in one of the only counties in the country where eminent domain is illegal!
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Regis
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Post by Regis on Apr 1, 2015 14:40:23 GMT -5
I might be slightly wrong, but in a typical eminent domain case, the land is forcibly purchased by the taker. So, while the property is taken, the current owner is paid the fair market value for the property (as determined by the courts). So the bank would want to get paid the $ since they hold title to it as collateral on the loan, which is being reduced by the land taken. I know I didn't word this well, but it would be the same as selling a piece of property split off a larger parcel that still carried a mortgage. The bank would get the money from the sale as a percentage of lost collateral. What you might be missing is money still exchanges hands in an eminent domain case, you just have an unwilling seller. You're right. It's called a "partial take" and usually what happens is the bank will do a "partial release" based on the %. If you look at your mortgage docs buried in the fine print is a section labeled "eminent domain". This is 100% correct. Normally, the government entity has an appraisal done on the property but many times that depends on the funding source for the roadway project.
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Bonny
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Post by Bonny on Apr 1, 2015 14:57:20 GMT -5
You're right. It's called a "partial take" and usually what happens is the bank will do a "partial release" based on the %. If you look at your mortgage docs buried in the fine print is a section labeled "eminent domain". This is 100% correct. Normally, the government entity has an appraisal done on the property but many times that depends on the funding source for the roadway project. But they don't necessarily share the appraisal with the property owner. With Federally funded relocation projects they are supposed to pay the highest probable price and can share comps but I don't recall sharing the appraisal. I could be wrong though it's been a few years.
I do know the property owners would get their own appraisal to make their case if they felt the government was low-balling them.
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whoisjohngalt
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Post by whoisjohngalt on Apr 2, 2015 22:05:27 GMT -5
This is 100% correct. Normally, the government entity has an appraisal done on the property but many times that depends on the funding source for the roadway project. But they don't necessarily share the appraisal with the property owner. With Federally funded relocation projects they are supposed to pay the highest probable price and can share comps but I don't recall sharing the appraisal. I could be wrong though it's been a few years.
I do know the property owners would get their own appraisal to make their case if they felt the government was low-balling them.
I personally think the homeowners should go see a lawyer, bc there is a concern that after the partial taking, they will have to re-dig their well, which could be very costly. So, should the govt compensate for that at all?
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Bonny
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Post by Bonny on Apr 2, 2015 23:11:48 GMT -5
But they don't necessarily share the appraisal with the property owner. With Federally funded relocation projects they are supposed to pay the highest probable price and can share comps but I don't recall sharing the appraisal. I could be wrong though it's been a few years.
I do know the property owners would get their own appraisal to make their case if they felt the government was low-balling them.
I personally think the homeowners should go see a lawyer, bc there is a concern that after the partial taking, they will have to re-dig their well, which could be very costly. So, should the govt compensate for that at all? For the well? Yes. But the property owners will have to provide proof.
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