How do I find out about home foreclosure laws?

Question

in Ohio? I need to know if I will be liable for any remaining balance after the bank sells my home or if it would just be a write off?

Answer 1

Have a look at your mortgage loan. If the loan is granted "without recourse" then you're off the hook if the home is foreclosed upon. However if the lender actually turned a profit on the foreclosure they could keep it.

If the loan is granted "with recourse" they can go after you for any shortfall upon foreclosure. If there is a surplus from the sale after all costs are covered, they'll have to pay that to you.

Answer 2

It most likley depends on the bank. In Indiana they usually write off the amount owed unless there is a STRONG possibility they can get the rest, but in Ohio it may be different. Check the statute or call legal services. It is likley they will just write off the amount though. Costs more to collect the deficiency then they would ever get

Answer 3

http://www.realtytrac.com/foreclosure_laws.asp?strState=Ohio

Here's the basic laws.

As for any liability for any loss, there's a couple things that could happen. They could come after you for it, but it's the stereotypical "blood from a stone". If you had any money, you wouldn't have lost your house. So it's rare they pursue it.

You could have a potential tax liability, though. They'll issue you a 1099 for the "forgiven" debt. Since you benefited from that money, it could be considered income. Leave it to the IRS to further punish you for losing your home. Collection agencies will often issue a 1099 for any portion of a collection that was "forgiven" in a settlement negotiation. This is similar.

You'll want to consult a tax professional, and possible even a real estate attorney. Obviously you do'nt have much money, but it could be worth it.