Question: With the drop in the housing market, what happens if my house is evaluated today, and is worth less in a month?
As well, does the trustee settle on the gross sale price of the house ie:(300,000 – 100,000mtg = 200,000 to be paid), or is the net price after what would be legal and real estate fees be the final amount owed by myself ie:(300,000 – 100,000mtg – 5%real estate – 2% legal = 179,000 to be paid)?
Answer: The trustee is required to negotiate a settlement with you for the value of the house. In most cases you will obtain an appraisal and confirmation of the mortgage balance, and then negotiate with the trustee for a fair settlement, which may involved the trustee giving some consideration to selling costs. The trustee is not permitted to simply do a mathematical calculation as you have shown; they must negotiate a fair settlement for all parties. However, the numbers you have quoted would in most cases be fairly close to the actual amount that would be required to be paid. Your trustee can provide you with more information.
