What are the consequences of a foreclosure for other borrower's assets? (ie: another house, savings acct, etc)
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Answer:
Since you put up the house as collateral for the mortgage loan, the bank does not have recourse to anything except the property. All of your personal belongings will remain yours, whether it is in the property or not. Fixtures that you've installed in the property (such as a new furnace, water heater, etc.), that can not be removed without damage to the property, will have to stay. But you can take all of your furniture and clothes and personal belongings.
If the bank wants to come after you for any other assets besides the house, they will have to sue you for a deficiency judgment. This is only the case if the house sells at sheriff sale for less than the amount that you owed on the loan. If the house sells for what you owe or more, there is no possibility of a deficiency judgment, since the bank will be paid off completely.
Just remember, you got the mortgage loan by promising them the house as collateral. They have no rights to go after your other personal belongings, unless the home sells for less than what you owed them.
And it's very, very uncommon for banks to pursue deficiency judgments against their clients. They know that you went into foreclosure because you couldn't afford to pay them anymore -- not because you had too much cash and didn't feel like making the payments.
Foreclosure is definitely not good for your credit, especially combined with all of the mortgage lates. If you can find out some way to pay off the loan, either by selling or doing a short sale, you're credit will be slightly better. The goal should be to get a Paid In Full rather than a Foreclosure showing on your credit, if at all possible. You can ask the bank for more time to sell, get them to postpone the sheriff sale, etc. Anything that give you a better chance of preventing foreclosure is best.
Good luck.
ForeclosureFish
http://www.foreclosurefish.com/...
they will take your house and anything in it and will hurt your credit for years
Yes, they can. It's called a deficiency judgement, and it's what the bank will try to get if you owe more than the house is worth. They will usually only pursue this if they think they can collect (if you have other assets).
Foreclosure is bad for your credit. Period.
A short-sale is when you get the bank to accept less than the loan amount as full payment for the loan. You do this when you owe more than you can sell the house for. It's tricky. I do this for a living. If you live in Maryland, contact me, or edit your post with you email.
Good luck.
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