Paul,

The lender has to sue you to go after your other assets. It's called a deficiency judgement. The only way for a lender to obtain a deficiency judgement is through a judicial foreclosure on the property. If they go for this type of foreclosure they fore go a trustee sale.

The chances of that are almost nil. It's costly and time consuming and gives you a redemption period that can further complicate things for the lender. I have not heard of a single instance of this happening. I'm sure it has but not to my knowledge.

You could also try a "deed in lieu". Basically, you give the house back to the bank and they accept the deed back "in lieu" of the foreclosure process.

You might get a 1099 but that only will apply to California. I believe the Feds forgive that income.

Good luck.

Brad

**DISCLAIMER** I am a licensed realtor, not an attorney or CPA or accountant.

THAT being said...it is always best to have a letter in writing from your current lender that you are FREE OF ANY AND ALL LIENS. The only way I know to do this is to "Short Sale" or "Short Pay" or lender. Your lender needs to agree to let you off the hook for the difference of what you owe and what you sell your home for. Even with this being completed satisfactorily, you stand a chance on getting a 1099C from the lender. This difference is a form of a "gift" from your lender, and is taxable income. If you can prove that it was your primary residence and have a good attorny and accountant, you should be able to skirt the tax.

I am VERY successful in helping people in situations similar to yours. If you are in need of expert handling of your property, please feel free to call or email me at:

530-701-6674 or Homes@CMe2BuyRE.com

Thank you,
Scott