Deficiency Judgment

When you lose your home to foreclosure or are short funds in paying off a debt to your mortgage lender, your mortgage lender may attempt to collect on that difference. If the lender goes to court and sues you and wins, the lender is said to have obtained a deficiency judgment against you. With that deficiency judgment, the lender can go after any other assets you may have. For example, if you own a home that was worth $250,000 with a $225,000 mortgage debt on it and you default on the loan and the lender forecloses on the home and sells the home for $175,000, the lender is out $50,000. The lender may then go to the court and ask the court to give the lender a judgment against you for $50,000 which the lender can then use to go after any other assets you may have. That judgment would be the deficiency judgment. Some states do not allow deficiency judgments.

Options for Underwater Homes: When Filing for Bankruptcy Makes Sense

Wondering about options available for underwater homes? If the bank denies a short sale, you may have to file for bankruptcy. By: Ilyce Glink and Samuel Tamkin Q: My husband and I purchased a condotel unit in Hawaii in 2006 …

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Strategic Default Options For Underwater Homeowners

Q: Do you ever address strategic default on rental property? I owe $135,000 and the property is worth only $65,000. A: Strategic default – hardly any topic in real estate raises hackles quite like this one. If your property is …

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Reporting Cancellation of Debt Income to IRS

Sell a property or lose it in foreclosure, you may end up with phantom income and have taxes to pay taxes on the forgiven debt. Q: Will mortgage companies report to the government the loss of a foreclosed property so …

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Investing In Real Estate With Friend Leads To Problems

If you invest in real estate with friends or relatives, plan ahead. Otherwise, you may find yourself deep with problems when money is short or disagreements arise. Q: My friend and I bought a single family house to make some …

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Underwater Mortgage May Lead to Strategic Default

      Can honor ever exist in a strategic default or foreclosure when you have an underwater mortgage? Q: My wife has a home that we currently live in that she purchased back in 2003. We find ourselves in …

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Deed-in-lieu or Foreclosure on Second Home

Deed-in-lieu or Foreclosure on a vacation second home is not a sure thing with a bank. Q: I have applied for a deed-in-lieu of foreclosure on a vacation beach home I own, but can no longer make the payments. I’m …

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Stop Paying Your Mortgage And Your Credit Score Will Suffer

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Strategic Default: When To Walk Away From Mortgages

A reader considers a strategic default on her home mortgage loan. Q: I am pushing 73 and my house is underwater. I have a first loan of about $140,000 and a second loan of about $18,000 with a 7.85 percent interest …

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Mortgage Lender Can Pursue Homeowners After Foreclosure With Deficiency Judgment

Q: I’m in trouble with my house. I’m heading to foreclosure, unless I can complete short sale quickly. Once we’re done with the property (either due to foreclosure or in a short sale), can the mortgage company require me to …

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Can You Be Sued For A Deficiency Judgment After Foreclosure?

Can you be sued for a deficiency judgment after foreclosure? Homeowners can be sued for a deficient judgment after foreclosure. Lenders sue foreclosed homeowners for a deficiency judgment after foreclosure. Underwater homeowners and foreclosed homeowners can still be sued for a deficiency judgment after foreclosure. Homeowners worried about being sued for a deficiency judgment after foreclosure should consult a real estate attorney.

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