It appears that the vast majority of the time a foreclosure by advertisement will result in the loss of the lender's right to a deficiency judgement. However, there are some exceptions to that rule of which people facing that situation should be aware. That statute is very complicated and as such I would recommend that anyone reading this because they may be facing foreclosure contact an attorney to find out what your specific rights are.
I have heard other agents state this but have never been able to find the statute that specifically dealt with it. I have had attorney's tell me conflicting information on this. Are you able to quote a source about foreclosure by advertisement not being able to take a deficiency judgement so that I can settle this in my mind once and for all?
I will be representing him to sell his home for less than he owes, and have the bank consider the lower sale price full payment for his outstanding mortgage...this is called a SHORT SALE.
The reason we are doing this is because if there are no other programs he can qualify for to refi into a fixed loan, and assuming he wants to preserve as much of his credit as possible without showing a foreclosure, lien judgment, or bankruptcy, a short sale is the beest option. When you get foreclosed on, the judgment for the amount you owe on your mortgage follows you ... i.e. garnished wages, lawsuit, etc...UNLESS you file for bankruptcy. If for example you owed $250K and the house sold at auction for $200K, there would be a judgment against you for the different of $50K. With a short sale, and depending on who your lender is and how your case is presented to the lender, the debt is forgiven once the short sale closes. And although you will have a ding on your credit due to possible missed payments, and reflecting the settlement via short sale, you can recover from that much easier and quicker vs showing a foreclosure or bankruptcy on your credit profile.
Go to the FAQ section of my website http://www.shortsaletosell.com for more information on short sales and how they work - or call me at: 732 822 6870 Good luck. Tom
It can direct you to state approved counseling and lending resources geared toward your situation.
Legends Realty Group LLC
If you can't refinance, you really have two options.
You can stay in your home and adress the payments as they adjust. Read your documents and find out how fast they can go up and then calculate what your payments will be when they do, you may be surprised. Your loan officer or a good realtor would also be able to help you with this if you don't feel comfortable doing it on your own.
Your second option is to sell your home and rent for a time while your credit is repaired and you can save up some cash for a downpayment.
Please let me know if you have any further questions or if I can be of any assistance.
What about taking on a roommate?