Will I be liable for a deficiency judgement on defaulted mul

hi brendalmiller,

welcome to this forum.

i think in the state of michigan, the primary method of foreclosure is non-judicial foreclosure.

are you right now in the foreclosure process? if the lender has not sent you a foreclosure notice yet, then you should try to avoid it because foreclosure will have a huge negative affect on your credit report. consult with you lender asap and see if you can afford any repayment plans.

if you can't afford any of the repayments plans, you can try out deed in lieu of foreclosure. here you have to request your lender for dil. but the lenders don't always agree for dil. the advantage in dil is you need not to pay deficiency judgment.

hope that will help you. feel free to ask if you have any further questions.

thanks,
larry

Hi Larry, thanks for the response. I can't afford repayment plans, I am already in foreclosure on one property. What is the tax implication of a deed in lieu and would it make sense to go with Deed in Lieu if one property is already in foreclosure? If I go foreclosure route, it sounds like a deficiency judgement in Michigan will most likely not be sought and my house in California will not most likely be at risk from the Michigan foreclosures?

Hi Brendalmiller,

Welcome to Mortgagefit discussion board.

I agree with larry that you should try to avoid foreclosure. Foreclosure is considered even worse than bankruptcy.

"will my house I reside in in California be at risk for being sold to pay a deficiency judgement."Yes, the lender can put a lien on that house in California also. As long as the debtor has the ability to pay the deficiency the lender will ask it. The lender may exempt the debt if the debtor is insolvent and don't afford to pay back the deficiency.

Do let me know if you have any other questions.

Thanks
Blue

Yes, I agree with Larry here. Michigan allows for non-judicial foreclosure, that is, without involving the court.

"Will a deficiency judgement be issued or will a non-judicial foreclosure be sought"

The deficiency judgment will only be issued if the lender goes for a foreclosure and then realizes that he cannot cover the entire motgage balance through the foreclosure sale. However, if your state is an anti-deficiency state and the loan is a first mortgage taken to buy your primary residence, then you are not responsible for the deficiency payment.

I think Michigan is not an anti-deficiency state and as such, the lender can ask for the deficiency, if any.

Hope this helps...

God bless you.

Samantha

If the homes that are delinquent go to auction then in most states the lender can get a judgement for the deficiency. The judgement can be placed on your primary residence. However, it is unlikely that they would foreclose on that home. You may want to contact a lawyer about a chapter 7 that would include any deficiencies. If you put money down on these homes, I would try and sell them to break even before giving them over to the bank, if at all possible. If you cannot sell and break even, then you can consider deed in lieu of foreclosure. If you do this, there is no deficiency.

If you are on the deed of a home but not on the mortgage, are you still liable for deficiency judgement?

Hi sb,

If you are on the title and not on the mortgage, you are not liable for the deficiency judgment. The one who signed the promissory note is held liable for the mortgage and any deficiency judgment related to it.

Thanks,

Jerry