if you are up side down on your house and you forclose, can the bank come after you for thier losses?

Asked by Malcolm Jordan, Thu Jan 3, 2008

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CJ Brasiel, Agent, San Jose, CA
Fri Jan 4, 2008
Every state is different and I would certainly advice you speak with a CPA or attorney. Usually, the lien holder can only come after your personal assets if it is a "recourse" loan. This wording will be in your mortgage papers. If it is a non-recourse they can not. Very critical for buyers to review their loan docs to clarify this wording.

CJ
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Deborah Madey, Agent, Brick, NJ
Fri Jan 4, 2008
State laws determine when a lender can pursue the property owner for a deficiency judgement. What state are you in? TIf you identify your state, perhaps individuals form that state may respond. This is really a legal question. Some RE Pros may have some insight., but legal advice needs to come from an attorney.
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Bill Seufert, Agent, Lancaster, PA
Fri Jan 4, 2008
Malcolm,

If you decide you are going to allow the bank to take back your home and the they will sell it to make up what they can on the original loan given to you. If they take a loss(I'm sure they will) once the sale of the property is final then you could be held liable in the amount satisfied below your current payoff for income tax. Example; you owe 100k the the bank satisfies the loan for 80k, you could be held responsible to pay income taxes on 20k for that year. The bank could also place a personal lien on you for the difference.
I would absolutely speak with a real estate attorney in your area to find the best avenue for you and your family.

Good luck and I hope everything works out.
Web Reference:  http://www.yorkshometeam.com
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