what happens after you lose your house to auction with the debt?

Asked by Tammie Queen, Clermont, FL Fri Mar 6, 2009

We have started receiving calls from a collection agency and aren't really sure how to handle this. Not to mention how do we know if company is legit?

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Keith Manson-…, , Milwaukee, WI
Fri Mar 6, 2009
The debt after a foreclosure sale is determined by the way the bank forecloses. If they foreclosed with deficency right they have the right to go after other assets. The foreclosure will clear the property of liens for the resale of the property, but does not clear the judgements for you depending on state law. If you had a second the second has the right to go after their money. If the value of the property is less than mortgage, the lender could put the short fall on the credit report and hire collection agencies to collect it. You should contact a attorney in your area to go over what the state laws alow and what options you may have.
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Pacita Dimac…, Agent, Oakland, CA
Fri Mar 6, 2009
Has your house already been foreclosed, meaning your lender has assumed ownership?


Or are you in default (received a notice of default for non-payment of your mortgage for a few months, usually 3-4 months).

Once you receive a notice of default, you have several options:
1) you can cure the default by paying what you owe
2) ask your lender for a loan modification
3) try to sell your house as a short sale where it is listed for less than what you owe (beware: not an easy task. Get a professional, seasoned and experienced short sale realtor to handle this for you)
4) if it doesn't sell within a period of time, talk with the lender about deed in lieu of foreclosure; i.e., you hand over the deed to the property
5) file for bankruptcy

If you are receiving collection notices, sounds like the bank is still attempting to collect the amounts of delinquency --- call your bank for confirmation


But if the house was already sold in an auction, and new owners are poised to take possession or sell it, you should receive a posted notice (on your front door) of eviction by a certain period of time. Once the property title and ownership has passed, you are now squattingo on a property that no longer belongs to you.

Hope this helps
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blaison samu…, Agent, Santa Clara, CA
Fri Mar 6, 2009
tell them "Our house already sold in auction so dont call me again otherwise you will hear from my attorney".

Well, I'm not an attorney but you have to contact to an attorney and show your mortgage or other documents to your attorney so that they can figure out what to do. Most probably, you dont have to pay anything to the collection agency but confirm with your attorney.
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