Foreclosure: Can they come after you?
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Answer:
I have counseled hundreds of home owners in foreclosure. To be honest it is very rare that they come after you for the deficiency. They know if you can't afford the house then you probably have no money for them to come after.
They may and do report the loss as income to the IRS. A good accountant can overcome that though.
Sure.
Is this the first, second, or even third mortgage?
It also depends on your state, but the short answer is.. Yes they can probably come after you, and you will lose.
Yep and the IRS will send you a TAX bill saying that was income.
in california, it depends. if the mortgage is a "non-recourse" then the lender cannot pursue your personal assets. if your mortgage is "recourse", then, yes the lender can sue you. in cali, all va and fha loans are considered to be "recourse" (and fha/va will chase you down for the shortage), but in general a "non-recourse" loan is the original financing that you used to purchase the home in the first place, excluding seller carryback. a recourse loan is generally a refi'd mortgage. if you are forced to do a "short sale", bear in mind that the lender is likely to report the $hortage to the IRS and they will come chasing for the taxes on it. this is an ugly situation to be in, so get professional r.e. advice, legal advice and tax advice!
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