Why do I get so many different answers? My friend wants to let their house go into foreclosure. What specifically is going to happen to them. I know there credit is going to be bad( they don't care) but what about their loan. How is the bank going to go after them if they have no money?
2007-11-08 12:02:11 · 3 answers · asked by Mike V 3 in Business & Finance ➔ Renting & Real Estate
They won't. The bank understands they have no money, so it would be a waste of time to try getting a judgment against them.
That doesn't mean that the state laws don't allow the bank to go after your friends. It just means that the banks almost never sue former homeowners after foreclosure.
2007-11-09 01:44:19 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Unless your friend is in a state the specifically bans suing for the deficiency, the back WILL go after them for the difference between whatever they get for the home and the mortgage balance. They will also charge for the costs of foreclosing and selling the home.
Suggest your friend try to negotiate a 'short sale without recourse'. A short sale is when the bank agrees to allow of the sale less than the mortgage balance. Without recourse means they agree to accept the proceeds as FULL settlement and not collect the balance.
A 'deed in lieu of foreclosure' is another option. This means you give them the title in exchange for them not foreclosing. Be sure the term 'without recourse' is used in this case as well.
2007-11-08 12:22:54 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
If there is still a balance after the sheriff's sale, they will try to garnish your wages just like any other creditor in a legal proceeding.
2007-11-08 12:11:03 · answer #3 · answered by koreangurl 2 · 1⤊ 0⤋