Posted on: 28th Jan, 2010 10:58 pm
I've googled "Deficiency Judgment" a gazillion times and have YET to see an example of someone going through the experience of a Deficiency Judgement. I realize that's because, in most cases, the person losing the house is broke. Why should the banks bother?
Here's my situation. I bought a condo for $225,000, my loan is for $200,000, and the value of the condo has dropped to $150,000 to $200,000. In fact, I'm not even getting any offers over $150,000. I don't believe in this project and I think the prices could go even further down.
In a perfect world, I would prefer to let this condo (my primary residence) go to foreclosure. But I have around $50,000 in savings, and I worry about the bank going after that. How likely is that to happen? Has anyone had that happen? How does all of that work? Any insight would be greatly appreciated. Mike
Here's my situation. I bought a condo for $225,000, my loan is for $200,000, and the value of the condo has dropped to $150,000 to $200,000. In fact, I'm not even getting any offers over $150,000. I don't believe in this project and I think the prices could go even further down.
In a perfect world, I would prefer to let this condo (my primary residence) go to foreclosure. But I have around $50,000 in savings, and I worry about the bank going after that. How likely is that to happen? Has anyone had that happen? How does all of that work? Any insight would be greatly appreciated. Mike
The value of the condo has dropped to $150,000 to $140,000.
And I live in South Carolina.
And I live in South Carolina.
Hi hopefulsc,
I don't have any real-life experience of facing deficiency judgments. But I've seen a lot of people post queries on deficiency judgments in this forum and many of them complain that their lender is garnishing their wages, coming after their bank accounts and other assets, etc. I also find a few posts where the posters say their lenders have forgiven the balance on the mortgage loan. Thus, I believe it is entirely up to your individual lender whether they will come after you for the outstanding loan amount.
It's true that getting a judgment against a borrower does involve certain amount of time and costs. Hence, most lenders would not want to get a judgment against a borrower unless they think that he still has the financial ability to pay off the balance on the loan.
I don't have any real-life experience of facing deficiency judgments. But I've seen a lot of people post queries on deficiency judgments in this forum and many of them complain that their lender is garnishing their wages, coming after their bank accounts and other assets, etc. I also find a few posts where the posters say their lenders have forgiven the balance on the mortgage loan. Thus, I believe it is entirely up to your individual lender whether they will come after you for the outstanding loan amount.
It's true that getting a judgment against a borrower does involve certain amount of time and costs. Hence, most lenders would not want to get a judgment against a borrower unless they think that he still has the financial ability to pay off the balance on the loan.