Mortgage lawsuits – Can a lender sue you after foreclosure?
Losing your home to foreclosure or even the struggle to arrange a short sale is in itself hard enough a task. But another blow might be waiting forward as the lender can come after you for the difference between the money that you owe and the worth of your home. One of the commonest questions that most of the home owners ask is if the lender can sue him or her even after foreclosure. And so, the answer is yes, the lender can come after you even after foreclosure for the deficit amount.
What you should know about mortgage
Some of the most important things that you need to know about your mortgage are if it’s a recourse or non-recourse mortgage. Mostly the homeowners are not aware if the state the live in is recourse or a non-recourse state. The recourse states allow the lenders to sue the debtor or the homeowner even after foreclosure. But the situation is totally different in case of the non-recourse states. Here, the homeowners cannot be sued for the deficit amount even after the home gets foreclosed.
So, first of all, it is important for you to know the laws of your state and then what your home is worth and how much you actually owe to the lender. This will help you to understand if at all, the lender can sue you and if you are required to pay the deficit amount.
For example in California, the anti-deficiency law provides for the debtor and it states that the lender who forecloses on the home cannot again sue the homeowner for any deficit. And still if the lender wants to get the deficiency balance, he will have to file a lawsuit requesting on a judgment of judicial foreclosure and a judgment for the deficiency amount. The large financial institutions hardly sue you in such cases.
Yet another thing that you need to know about mortgage and lawsuit is that if you had taken two mortgages on your home and if the first mortgage gets wiped out through foreclosure, the second lender can still sue you for the loan amount. He can obtain a judgment against you and try to get back the money that he had given to you through the home loan.
So, you can see that there are various things that should be considered to decide whether or not the lender can sue you for the home loan even after your home gets foreclosed. Though, commonly lenders can sue you for the deficit amount even after foreclosure.
As a leading real estate agent in the San Diego county, John A Silva has over 19 years of experience, and specializes in short sales and foreclosures. View his website for real estate market information, trends, and advice.
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Categorised as: Mortgage