Say that a person lets the property go into foreclosure ... and the bank eventually sells the property at a loss of $10,000.00 can the bank seize the persons other assets like retirement accounts, savinings accounts, and real-estate they live in?
2006-06-17 10:21:13 · 4 answers · asked by Giggly Giraffe 7 in Business & Finance ➔ Renting & Real Estate
The mortgagee ( the lender / bank ) has the right to file a suit for a deficiency judgment for any loss suffered. However, because of the situation, this is very rarely done. Normally, they would win the suit but then how do they collect ? If a person has lost a property through foreclosure, it isn't very likely that they are collectible. But, if a person does have other assets and the lender knows about it, they may file for a deficiency judgment. If one is in the situation of possibly being foreclosed, it is usually better to sell the property and pay off the mortgage or discuss with the lender the possibility of a "deed in lieu of foreclosure".
2006-06-17 10:34:46 · answer #1 · answered by Anonymous · 2⤊ 0⤋
The answer is NO. They can obtain a judgement for the difference, but retirement accounts and homesteaded real estate property are exempt from seizure or garnishment. Government loans for mortgage purposes may have some authority to garnish bank accounts....but private mortgage companies do not.
2006-06-17 17:33:36 · answer #2 · answered by deputydawg 2 · 0⤊ 0⤋
Did the person go into a legally binding agreement with the bank to pay the mortgage for the amount owed (principle and interest)?
Unless they did not have full faculties when they went into the contract or did have their other properties and net worth properly shielded, then yes their other assets are now on the line.
2006-06-17 17:28:03 · answer #3 · answered by Joseph P 1 · 0⤊ 0⤋
Yes, the new bankruptcy laws makes the individual responsible. However, I believe retirement accounts are exempt.
2006-06-17 17:27:44 · answer #4 · answered by uogcls 2 · 0⤊ 0⤋