Can a Bank Come After Me After I've Sold My Home in a Short Sale?

Coming Home - Can a Bank Come After Me After I've Sold My Home in a Short Sale?

Good afternoon. Yesterday, I discovered Coming Home - Can a Bank Come After Me After I've Sold My Home in a Short Sale?. Which may be very helpful to me therefore you. Can a Bank Come After Me After I've Sold My Home in a Short Sale?

In a word: yes. After defaulting on your mortgage payments, a home enters into foreclosure. You have two choices: enter into foreclosure or sell the asset in a short sale and hope that it covers the debt that is owed. It is after the home is sold in a short sale that the issue of a deficiency judgment even occurs--after a home is sold in a short sale and the monetary amount is less than the amount owed to the lender.

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This deficiency judgment, a court order, may be an issue if the lender decides to sue for cost of the remaining mortgage. It is finally decided by a court-sanctioned "final amount" in most cases, but as an estimation of net loss in others.

So, in going after the primary homeowner, co-signer, parties complex in the purchasing end, all of these individuals are responsible for paying back the debt incurred in owning the home. Then, if the amount owed cannot be repaid, the lender can take these population to court. Granted, there is the selection of avoiding foreclosure by exchanging the deed of the asset to the lender, called deed in lieu of foreclosure, but even then, the lender can still sue over the deficiency judgment.

Yet, not all lenders rule to taken these old homeowners to court. First of all, it depends on the type of foreclosure--judicial or non-judicial. It also depends on the state, since determined states have distinct rules and regulations concerning foreclosure. an additional one factor depends on the actual terms of the mortgage. Finally, the lender has to take into list the distinct costs that are factored in, along with court costs, interest payments, penalties for pre-payments, and back necessary payments. However, it all comes down to whether or not the lender feels that he/she can secure the deficiency judgment and the ultimate cost that will be incurred to secure this judgment.

During the process, the homeowner must report his/her net worth, which will help the lender rule whether or not to pursue this case.

Bottom Line:

So you've probably found this entry because you are whether facing foreclosure or have already foreclosed and are wondering if you are going to be on the hook for any more money. The only way to know is by reading straight through your foreclosure or short sale papers. Most of the big banks will have some sort of deficiency clause in there, but that doesn't all the time mean that they will genuinely go after you. It costs them money to cary out a deficiency judgment and if you don't have any they will just move on. That being said, if you have just walked away from your house because you were underwater, well, if you were the bank wouldn't you go after you?

If you are considering foreclosure, you may want to enlist the aid of an attorney and get them to rework your contract to avoid a deficiency judgment. Government-paid foreclosure experts that help with loan modifications, relocation assistance, etc. Can also help in getting a deficiency judgment removed. You have minute leverage when foreclosing, but genuinely more than after you have signed all the papers.

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