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Can lender pursue deficiency judgment for the difference after a short sale?
Wiki User
∙ 13y ago
Some states allow deficiency judgments after the short sale. Some states allow deficiency judgments after repossession or foreclosure. Each state has its own rules.
Wiki User
∙ 13y ago
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What happens if you let you house go into foreclosure in the state of Colorado?
These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.AlaskaArizonaArkansasCaliforniaColoradoDistrict of Columbia (Washington DC)GeorgiaHawaiiIdahoMississippiMissouriMontana (as long as non-judicial foreclosure is used)Nevada - note that the lender CAN get a deficiency judgment (See below)New HampshireOregonTennesseeTexas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)VirginiaWashingtonWest VirginiaThese are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:MichiganMinnesotaNorth CarolinaRhode IslandSouth DakotaUtahWyoming
Which states are non-recourse states for mortgage debt?
Non-recourse states cannot pursue you for their financial losses. Alaska Arizona Arkansas California Colorado District of Columbia (Washington DC) Georgia [THIS IS INCORRECT. GEORGIA IS A RECOURSE STATE] Hawaii Idaho Mississippi Missouri Montana (if non-judicial foreclosure is used) Nevada - (lender can get a deficiency judgment) New Hampshire Oregon Tennessee Texas (lender can get a deficiency judgment) Virginia Washington West Virginia The following states allow non-judicial foreclosure: Georgia [Georgia allows non-judicial foreclosures] Michigan Minnesota North Carolina Rhode Island South Dakota Utah Wyoming
What happens to an unpaid business loan?
That's entirely up to the lender. They can pursue it in civil court and obtain a judgment lien that will enable the creditor to seize any property to satisfy the lien. A large lender is more likely to write off a small loan, and your own liability depends on how the company was set up.
On a foreclosure who pays the difference in principle?
There are several possibilities. 1) The lender may continue to pursue the borrower for the money after foreclosure. 2) The lender may just write off the loss. 3) depending on the mortgage insurance situation, the insurance company may contribute.
If you walk away from your mortgage can the lender sue you for their loss?
Yes. You will also be "walking away" from property taxes and municipal utility service charges that will continue to accrue in your name. You should work with the lender to end your relationship legally so that the title does not remain in your name. Yes, even if you voluntarily surrender the keys - if the property is then sold a few months later at auction any losses that aren't covered by the proceeds of the sale will be added to the balance owed. The lender can pursue you for the deficiency. The best solution is to try to work out an agreement with the lender.
What deficiency judgment laws in Maryland?
A homeowner who is foreclosed upon in the State of Maryland is exposed to the lender pursuing a deficiency judgment for the portion of the total debt not repaid from the proceeds of the foreclosure sale. The lender must pursue the in personum judgment (judgment against the person) within 3 years of the final ratification of the foreclosure.
If condo association forecloses on an owner does the lender pursue deficiency judgment against the owner or condo association?
Your attorney can help you answer this question, since it requires a legal answer.
What if you win lottery and stop paying mortgage?
The lender will take possession of your property by foreclosure. It will then sell the property and will pursue you in court for any deficiency and legal costs.The lender will take possession of your property by foreclosure. It will then sell the property and will pursue you in court for any deficiency and legal costs.The lender will take possession of your property by foreclosure. It will then sell the property and will pursue you in court for any deficiency and legal costs.The lender will take possession of your property by foreclosure. It will then sell the property and will pursue you in court for any deficiency and legal costs.
What will a lender do if someone takes their car overseas and then stops making payments?
The lender will have the right to pursue a civil judgment in court for the outstanding debt. If not paid, wages can be garnished or a warrant for arrest can be issued.
What happens if you let you house go into foreclosure in the state of Colorado?
These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.AlaskaArizonaArkansasCaliforniaColoradoDistrict of Columbia (Washington DC)GeorgiaHawaiiIdahoMississippiMissouriMontana (as long as non-judicial foreclosure is used)Nevada - note that the lender CAN get a deficiency judgment (See below)New HampshireOregonTennesseeTexas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)VirginiaWashingtonWest VirginiaThese are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:MichiganMinnesotaNorth CarolinaRhode IslandSouth DakotaUtahWyoming
What are Colorado's laws regarding deficiency judgments after a non-judicial foreclosure?
Colorado is a full recourse state. Creditors may pursue a debtor for a deficiency judgment for 20 years after the debt was incurred. Moving to another state could result in the creditor domesticating the deficiency judgment and then the new state's statute of collection limitations would apply.
How long before you don't have to pay off a car that was repossessed?
The lender will pursue collections for any unpaid balance for seven years from the date the car was sold after being repossessed. If the balance is large, they may pursue legal judgment. Obtaining this, they will have ten years from the date of judgment or last payment.
What are the deficiency judgment laws in Georgia?
J. Deficiency Judgment The foreclosure sale may not produce enough cash to pay the loan balance in full, after deducting expenses and accrued unpaid interest. In this case, the lender may be entitled to a personal judgment against the borrower for the unpaid balance. The lender is not required to seek a deficiency judgment and most commercial and residential lenders in Georgia do not seek deficiencies; however, it is allowed. Deficiency may also be obtained against any endorsers or guarantors of the note and against any owners of the mortgaged property who assumed the debt by written agreement. If any money remains from the foreclosure sale after paying the debt and other liens, such as the second mortgage or any mechanic's liens, expenses and interest, these proceeds are paid to the borrower. If the lender seeks a deficiency judgment in Georgia, the lender must file for a deficiency within thirty (30) days of the foreclosure sale and follow the procedures outlined in OCGA § 44-14-161, or the claim for a deficiency is barred. The foreclosure sale must be confirmed and the deficiency judgment must be approved by a judge of the Superior Court in the county in which the sale occurred. The above answer is correct, literally...but it overlooks one major item: GA laws respecting the note vs mortgage. The "note" (which is the contractual loan obligation) is separate from the "mortgage" on the property. Both are legal instruments. Thus, a lender in Georgia could get around the requirements of judicial confirmation by first filing a lawsuit for breach of contract under the "note." This is strict and is easily determined (e.g., you miss one payment). If the note contains an acceleration clause (it will), then once you miss a payment the entire loan becomes due. The lender can easily obtain a judgment on that breach, as a result, for the full amount of the loan. This becomes a judgment lien that the debtor owes to the lender. The lender can then (separately) foreclose on the mortgage. Under the power of sale, the lender will sell the property at public auction (per the rules). If the foreclosure does not net the full amount of the mortgage, then the lender must seek a judicial confirmation in order to collect on the deficiency...but wait...what about the judgment lien from the lawsuit under the note? The lender DOES NOT need to confirm that... As such, the proceeds from the foreclosure can be applied to the judgment lien but the lender does not need to seek confirmation to collect on the deficiency under the judgment lien (lawsuit under the note). For example: X takes out a loan from Y for 100K to buy a house. Y obtains a mortgage to secure and a signed note for 100K from X. Later, X misses a payment and Y sues under the note, obtaining a judgment for 100K (the value of the note/loan). After obtaining that judgment, Y forecloses on the property and sells it at public auction (per law). Since property values are down, Y is the only bidder. Y bids 1K for the property and is the highest bidder (even though the property is worth 70K now). Y does not seek to confirm the sale but instead applies the 1K to the 100K judgment lien and pursues X for 99K difference. Y will win under Georgia law. Thus, Y gets a 99K judgment against X (Y can pursue in court or sheriff's sale etc) and gets a 70K piece of land for 1K. In all, Y could potentially pull in 169K from the 100K loan because Y did not have to confirm the 1K foreclosure sale in order to collect under the judgment lien (from the note). X gets a 99K judgment against him/her, zero property, and some legal fees...ya think GA nees to change its laws?
Which states are non-recourse states for mortgage debt?
Non-recourse states cannot pursue you for their financial losses. Alaska Arizona Arkansas California Colorado District of Columbia (Washington DC) Georgia [THIS IS INCORRECT. GEORGIA IS A RECOURSE STATE] Hawaii Idaho Mississippi Missouri Montana (if non-judicial foreclosure is used) Nevada - (lender can get a deficiency judgment) New Hampshire Oregon Tennessee Texas (lender can get a deficiency judgment) Virginia Washington West Virginia The following states allow non-judicial foreclosure: Georgia [Georgia allows non-judicial foreclosures] Michigan Minnesota North Carolina Rhode Island South Dakota Utah Wyoming
Is the loan balance collected from the servicer in a foreclosure?
In a foreclosure the proceeds from the sale go to the servicer, who in turn remits those funds (minus any costs and fees owed to the servicer and its affiliates) to the investor on the loan (lender or agency). If there is a deficiency, the difference may be written off and a 1099c issued to the debtor, effectively ending the matter, or if legally allowable the lender may pursue the debtor through a collection agency or the courts.
If you voluntarily relinquish your vehicle will the lender allow you to repay any deficiency after the sale of the vehicle at 100 dollars a month?
It's not possible to give a definite answer as it would be the lender's decision alone. However, most lenders are willing to work with the debtor if it is at all possible rather than pursue litigation or perhaps force the debtor into bankruptcy.
What happens to an unpaid business loan?
That's entirely up to the lender. They can pursue it in civil court and obtain a judgment lien that will enable the creditor to seize any property to satisfy the lien. A large lender is more likely to write off a small loan, and your own liability depends on how the company was set up.
