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Asked by Damselfly2, Lowell, MA Fri Jan 22, 2010

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Answers

11
Anna M Brocco, Agent, Williston Park, NY
Sat Jan 23, 2010
Why not contact your attorney again and express all your concerns, he/she is your best source of information.
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Sat Jan 23, 2010
You need to find these answers:

How do they foreclose in MA? It's either two ways. Judicial Foreclosure or Non-Judicial Foreclosure. If the foreclosure process is non-judicial then the lender will not go after you for a deficiency judgment at the time of foreclosure.

Next, what type of loan do you have. Recourse loan or non-recourse loan?
If the loan is non-recourse then the lender has no legal right to come after you. However, if your loan is a recourse loan then the lender may foreclosure by non-judicial foreclosure and still come after you for the balance. In this case, they would have to obtain a deficiency judgment against you. The lender might sell that debt to an insurance company or a collection agency who will purchase the debt at a discount and then go after you for the full balance. You can try to settle the debt at a discount. However, you really need to have someone look over your paperwork if you can understand the verbage you are good. If you do not know what type of loan you have then you can visit a Hud Counselor who for free can assist you unless you want to go back to your attorney and pay those fees. Good luck!


http://www.hud.gov
0 votes
Ken Lambert, , Exeter, NH
Fri Jan 22, 2010
Hello. I am not an attorney, but the last I heard was a definite Yes. You can be sued for what the bank actually lost, plus the bank's fees for having to foreclose/ legal, etc.
That's the unfortunate answer- for a home seller.
If you need a good local attorney to discuss this with, maybe a 2nd opinion, please let me know- I work with a few.

Thanks, and good luck,

Ken L.
0 votes
Heidi Zizza, Agent, Framingham, MA
Fri Jan 22, 2010
I think anyone can sue anyone for anything! Wether or not the judgement is granted is entirely up to the courts. If you trust your Attorney go with their suggestions!
Web Reference:  http://www.mdmrealtyinc.com
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Fri Jan 22, 2010
Have you gone through an auction? or do you still have time to consider other options like:

Forebearance
Loan Mod
Deed in Lieu
Bankruptcy
Short sale
0 votes
Damselfly2, Home Seller, Lowell, MA
Fri Jan 22, 2010
you're correct. i confused the tax ramifications with the lender ramifications... :(
Very separate evils...
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Fri Jan 22, 2010
I am very familiar with this article. The article you are talking about is the refers to the forgiveness of debt and not a deficiency judgment.

It addresses the tax liability of the forgiveness of debt in either a short sale or a foreclosure where you do not owe the balance. Prior to 2007 that could have been considered taxable income. The provision says that if the debt was for the original loan on a primary residence than you would not have to pay income tax on deficient balance. It does not say the banks can't come after you it only refers to the IRS.
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Fri Jan 22, 2010
The short answer is yes.

I believe in Massachusetts the banks have 2 years to file for a deficiency judgment and 20 years to collect. (verify with an attorney) I do a lot of short sales and am in contact with many people in various stages of the foreclosure process and in most cases I have not seen deficiency judgments filed if the house ends up being foreclosed upon. Though on occasion I have seen people who have gone the loan mod route who were denied and go into foreclosure who have been slapped with a judgment.

It is really catch as catch can, with no rhyme or reason. If you have not gone into a foreclosure, it is worth checking out your other options to avoid the judgment hanging over your head.

I have also wondered what will happen as the crisis slows down and the banks have the time to put towards collection. 20 years is a long time to collect and if they can spend a minimal amount on legal fees... who knows, maybe we will see more judgments.
0 votes
Damselfly2, Home Seller, Lowell, MA
Fri Jan 22, 2010
Actually, after searching i beleive the answer is NO.

http://www.irs.gov/irs/article/0,,id=179073,00.html
0 votes
Kristen Blan…, Agent, Dracut, MA
Fri Jan 22, 2010
To the best of my knowledge the lender does have the right to come after you for any money that is still owed after they foreclose including their attorney fees. It's always best to try to do a short sale and have the debt forgiven.
Web Reference:  http://www.sellyourden.com
0 votes
Bob Movin-On, , Hartford, CT
Fri Jan 22, 2010
The answer is yes, BUT in the times we are in no one is sure if the bank will bother pursuing it. My business helps victims of foreclosure and I have seen it go both ways.
Good Luck
Bob
0 votes
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