Foreclosure Real Estate Homes

Re: Can bank come after me after foreclosure

Posted by Julio Martinez-Clark on April 01, 2008 at 19:05:53: In Reply to: Can bank come after me after foreclosure
Posted by kevin on April 01, 2008 at 15:18:59: Kevin,

It all depends. This website has some scenarios based in CA law that can
illustrate the consequences:

From an article titled "Homeowners Dilemma: To be or not to be in Foreclosure"
(which I recommend you read) that I wrote on the subject in my blog:

"In regards to a mortgage deficiency judgment, it depends on your state laws.
Generally, if your first mortgage/lien holder forecloses on the property, it isn't
that common to see that the first purses deficiency judgments because it's
usually the larger loan, and its goal with the foreclosure is to take the property
and then sell it and get their money back (or most of it); again, it depends on
your state laws and the disposition of the 1st to pursue a deficiency judgment. In
the case of a second lien/mortgage holder, under current market conditions, it
could very well be wiped out at the sale (nobody bids in your home and the 1st
will take it back) and then in order to make you pay, it will try to harass you
(phone calls, letters) and perhaps sue you to get a judgment against you that can
be enforced by garnishing your wages, bank accounts, other personal and real
property that you may own, and seizing and selling your assets to satisfy the
debt. Many homeowners are concerned about personal liability from mortgage
foreclosure deficiency judgments. Although they accept loss of equity, if any, in
property which is foreclosed by their mortgage lender, people are afraid of a
deficiency judgment.

Depending on the laws of the state where the property is located, a mortgage
foreclosure could or could not automatically result in a deficiency judgment; so
that just because you lose a property at foreclosure does not mean you will
remain personally liable for money owed to the lender . For instance, in the State
of Florida, to obtain a deficiency judgment against the borrower, the mortgage
lender has to file a separate motion for a deficiency after the foreclosure sale,
and the court must hold a separate evidentiary hearing on the lenders request
for deficiency liability. At the evidentiary hearing the mortgage lender has to
show the court evidence that the propertys value on the sale date was less than
the note balance. The borrower has the opportunity to present his own evidence
at that same hearing to demonstrate that the property value was equal to or
exceeded property value. If the property was worth more than note balance on
sale date the court will not give the mortgage lender a deficiency judgment
against the borrower. The borrower may present evidence of value in the form of
a formal appraisal or other less formal opinions of value.

During the recent real estate boom deficiency judgments were uncommon
because increasing real estate values brought home values above note balances
of defaulting mortgages. Additionally, lenders could take back "upside down"
properties and hold them until the rising market made them whole. In the current
real estate recession, more lenders may pursue deficiency judgments. Even in a
weak market, if there is still equity in your property when you relinquish the
property through foreclosure you can defend a motion for deficiency judgment. "

There are many outfits that offer to fix people's credits. Please be extremely wary
of these companies. There is no magic formulas here. Many of these companies
are a scam. To my knowledge, most of the reputable ones use a simple
technique based on the Fair Debt Collection Practices Act (FDCPA) which is to
request the credit bureaus (Equifax, Experian, TransUnion) validation of the
negative entries in your credit history and wait 30 days for the bureaus to
respond; under the FDCPA, if the bureau doesn't respond, it has to delete the
entry. Most of the bureaus know this and respond within 30 days.

As far as a tax advisor, a CPA/Accountant is y
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