The simple answer is yes. If your property goes through a foreclosure your lender will then have the home sold at a sheriff sale. When the home is sold there is usually a shortage or "defiency" that occurs and the lender is not made whole or the mortgage is not completely paid in full. Your lender then has the right to collect this shortage from you. It can be in the form of a wage garnishment, bank garnishment, etc. Typically the lender assumes you have no money or you would have paid your mortgage so they usually do not do this though it is their right. However, there will most likely be a judgment against you that will cause you issue in the future when getting a new loan or credit card or car ins. Typically the best thing to do is to ask your lender if they have any foreclosure alternatives. A short sale in which the lender agrees t o take a lesser amount as a pay off or possibly the ability to sign the home over to the lender as settlement of the mortgage, also known as a deed-in-lieu.
Unfortunately once Sheriff Sale has taken place your options are limited. You can redeem the house within a 6 month time period from the date of the sale by paying the mortgage off in full, including fees and penalties. This is generally quite tough because your credit is already damaged and you won't find a lender to finance you. I wish you luck in 2013!... more
good morning..the quick answer as maureen said, is no....the only way it could happen is if the mortgage on the home going into default is cross-collateralized with your other home...occasionally, private lenders and banks will encumber another property as added collateral to protect their exposure...
brighton, michigan... more