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can I be sued for the loan amount shuld I foreclose on the property?

Posted on: 10th Feb, 2010 10:53 pm
If my Mortgage loan is a non recourse loan, can I still be sued for the loan amount if I foreclose on the property?
Hi advantage,

As far as I'm aware of, non-recourse loans do not allow the lender to sue the borrower for the deficiency. Such loans are secured by the value of the property. If the value of the property is less than the amount owed on it, the lender will not have any right to come after your other assets to collect the deficiency.
Posted on: 11th Feb, 2010 02:19 am
I just keep hearing that after foreclosure the banks sells you debt to a debt collector and then they can sue you for the amount or the bank itself will sue.
Posted on: 11th Feb, 2010 07:23 pm
Hi advantage,

If it's a non-recourse loan, the lender will not be able to sue you. When the lender offers you a non-recourse loan, he actually agrees to suffer the loss in case you default on the loan and the property sells for less than the outstanding loan amount. They can neither sell your debt to a debt collector nor can they sue you for the difference between the sale price of the property and the amount of loan owed against it.
Posted on: 11th Feb, 2010 11:15 pm
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