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Newbie, question on Foreclosure

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    #1

    Newbie, question on Foreclosure

    If I have a mortgage with the property as collateral.. and I can't make payments on the house anymore, the bank can take my house in foreclosure..

    but.. let's say the bank doesn't recover the full value of the loan.. can they still come after me for the difference or is the only thing i lose is the house
    Tags: None
    #2
    Depends on the Law in your State. Or the verbage in your Mortgage Instrument.

    Many States, the primary mortgage cannot hold the borrower accountable for a deficit balance. But a 2nd mortgage can most every where.

    You're really gonna have to research your State's Mortgage Laws, read thru your Mortgage, or ask a local attny.
    Filed Ch 7 - 09/06
    Discharged - 12/2006
    Officially Declared No Asset - 03/2007
    Closed - 04/2007

    I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

    Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

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      #3
      Thank you. I will look into that. One more question.

      Let's say I have money but just don't want the home anymore. Can I stop making payments, let them foreclose, lose my property and keep my money or can they take all my money also.

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        #4
        sorry, i guess my second question is more likely the same as the first..

        i am in ny (nassau county) do you know if they have anti deficiency laws?

        Comment

          #5
          I looked around a bit on line and couldn't find a definitive answer for you.

          Read thru your mortgage. There might be some sort of statement that says you aren't responsible for a deficiency balance if the property is sold at Foreclosure.

          If you learn that you won't/can't be held liable, then the Lender cannot take your savings.
          Filed Ch 7 - 09/06
          Discharged - 12/2006
          Officially Declared No Asset - 03/2007
          Closed - 04/2007

          I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

          Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

          Comment

            #6
            crynow.. im in a similair situation and live in michigan. i will not be held accountable for negative monies, per my attorney. my primary home the first mortgage is $199k, second mortgage $31k and home is now worth $190k (per SEV). i am not sure of the exact details as to how or why not i won't be held responsible... i beleive since the home is surrendered in the ch 7, is the reason i will not be responsible for anything. in my case both first and second are stuck with negative monies and this does not include their costs to be incurred.

            i also have a rental house i own.. first mortgage $99k, second $26k home value is 120k. In this case the first mortgage should get their money (or at least most of it) and the second will get none. again, per my attorney i will not be responsible for the negative monies.

            additionally, i was specifically advised by my attorney (over the phone) to NOT do a "deed in leiu in foreclosue". when we meet again in person i will learn the specific reasons why.

            Comment

              #7
              in additon.. i can comment that i also have money that could reduce the amounts owed or pay towrds keeping the mortgages current ($10k tax return in my account). my attorney advised that since i wanted to include both homes in chap 7, quit paying them. for me specifically my primary home (cause the mortgage is quite large) and there is negative equity, i wanted to include it. and for my rental home i am slighty negative on the mortgagte to value. and my reason to dump it is that WaMU didnt want to work with me and i didnt want the headache for a fight. this will give me a true fresh start.

              as for the cash in my account.. the attorney has protected it with a wild card available in michigan. of that balance the amount is getting reduced $1,000 per month for my "other" necessary expenses.
              Last edited by troublmaker_98; 05-14-2007, 06:21 PM.

              Comment

                #8
                Originally posted by troublmaker_98 View Post

                additionally, i was specifically advised by my attorney (over the phone) to NOT do a "deed in leiu in foreclosue". when we meet again in person i will learn the specific reasons why.
                Most likely because you WILL BE 1099'd for the deficiency if you do this. Most mortgage companies don't want you to know this.
                11/14/07 -filed C7 12/04/07 -case pulled for random audit.12/18/07 -341 held: Asset case due to engagement ring & tax return.02/19/08 - US trustee files motion to extend. 04/02/08- changed back to NO ASSET! I get my ring back and get to keep my tax return! :clapping: 04/28/08 -DISCHARGED!!! :yahoo::yahoo: 05/07/08 - CLOSED!!!

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