will i be responsibile for the remaining balance if my home goes into forclosure once the bank sells it.?

Asked by Marc, Paxton, FL Sun Aug 7, 2011

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Short Sale M…, Other Pro, MA,
Mon Aug 8, 2011
Massachusetts is a recourse state. If the home is in a recourse state, the lender has rights to pursue you for the remainder of the balance and also the penalties, fees, interest, etc.

If the lender forgives the debt, and it is not your primary residence, i.e., second home or vacation home, unless you are INSOLVENT you WILL be responsible for taxes should the lender forgive the debt. Forgiveness of debt or cancelation of debt income CODI can only occur if the lender waives their right to pursue you for the balance. The taxes on the forgiven portion will not have to be paid UNLESS the foreclosure happens after 2012 as the Mortgage Debt Forgiveness Act was for sales of residences from 2007 through 2012, thanks to President Bush.

It's likely safer to try for a short sale, but seek an attorney's advice.
1 vote
Ron Thomas, Agent, Fresno, CA
Sun Aug 7, 2011
There are five basic things that COULD cost you through a Foreclosure:
1.) The difference of the amount owed and the sale price of your house: Called the DEFICIENCY, this should not be a problem for you, as Florida is a NON-RECOURSE state.
2.) The 2nd (if you have one) Lien, such as a HELOC or a 2nd Loan: This could still be a problem
3.) The Income Tax owed on the realized income from the Forgiveness of the Debt; as of 2009, this is no longer a problem thanks to your President.
4.) HOA fees: which are not wiped out by the foreclosure and will transfer to you and follow you.
5.) Property Taxes; probably will not be wiped out, (I can't speak for your County).

Good luck and may God bless
1 vote
, ,
Sun Nov 20, 2011
If you want to stay in your home a sale lease back might be an option for you.
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0 votes
Mike Linkena…, Agent, Jacksonville, FL
Fri Nov 18, 2011
It depends on if you are in a deficiency state. In Florida, yes you are, however Fannie Mae's current policy is to NOT pursue deficiency judgements in foreclosures except in extreme cases. For more info, check out -
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Mon Nov 14, 2011
Marc- Not sure where you are in the process of foreclosure. It is generally best to avoid foreclosure if possible. If you have to sell than a short sale is a good option.

Unfortunately Florida is a recourse state. All state laws are different and I would encourage you to talk with an attorney to see where you are in the process and the best way to limit your financial exposure in the future.
0 votes
Luis S. Munoz, Both Buyer And Seller, Indialantic, FL
Sun Nov 13, 2011
The banks have been foreclosing illegally for the last 5 years. If in your case the bank foreclosed illegally, I have a way to vacate the foreclosure, the sale and any claims against you. I you send me a copy of the documents I can tell you how to fight this problem. Call me at 321-549-1052 or email me at : munozmelbourne@yahoo.com and I will counsel you on the best alternative. You could get your house back and have the bank pay you for your losses. THERE IS A WAY. Don't give up
Luis S
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Christopher…, Agent, Methuen, MA
Sat Nov 12, 2011
Marc, I always recommend that an attorney be consulted in these situations. Often times an attorney may be able to negotiate debt forgiveness into a deal for you while also helping you to avoid foreclosure through a short sale or other means. It is always a good idea to consult with an attorney before signing any legal documents especially if you don't understand what you are signing. I know a great real estate attorney in Methuen if you need a referral. I wish you luck.

Web Reference:  http://teamlefebvre.net
0 votes
Margaret Has…, Agent, Tampa, FL
Sun Aug 7, 2011
It is possible that you could be responsible for the remaining balance after the bank sells it, so you should consult with an attorney. You can call your mortgage lender and ask them what their policy is. You can also check http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_for… for some good information.
0 votes
Scott Godzyk, Agent, Manchester, NH
Sun Aug 7, 2011
You certainly could, the baloance plus the expense of the foreclosure. You would be better off to sell it through a short sale where you can negotaite what happens to that shorted amount than just letting it go.


Please see my blog for tips on short sales and how to complete one
Web Reference:  http://www.ScottSellsNH.com
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