Posted on: 08th Feb, 2010 12:07 am
OK, I have a decent job and am considering purchasing a condo to live in (owner-occupied).
Of course, like everyone else, I always worry about job layoffs, even though I seem to have made it through the roughest part. Nevertheless, a friend who is a HUD attorney suggested for "peace of mind" to buy the condo with a FHA-insured loan. His reasoning was, God forbid I ever lose my job, but if I did and had to lose the condo to foreclosure, that the FHA does NOT pursue a deficiency judgement on other assets as long as it is an owner-occupied house.
I realize that, with any foreclose, I would lose any money invested into the property (i.e. down payment), but I am more concerned about losing my savings, etc.
Does that sound accurate? Any input or insight would be greatly appreciated. Thanks.
Of course, like everyone else, I always worry about job layoffs, even though I seem to have made it through the roughest part. Nevertheless, a friend who is a HUD attorney suggested for "peace of mind" to buy the condo with a FHA-insured loan. His reasoning was, God forbid I ever lose my job, but if I did and had to lose the condo to foreclosure, that the FHA does NOT pursue a deficiency judgement on other assets as long as it is an owner-occupied house.
I realize that, with any foreclose, I would lose any money invested into the property (i.e. down payment), but I am more concerned about losing my savings, etc.
Does that sound accurate? Any input or insight would be greatly appreciated. Thanks.
Hi,
When you buy a home with an FHA mortgage, your loan is insured by the FHA. Thus, in case of any default on the loan, the FHA will insure the lender against any loss from the foreclosure. Generally, lenders do not come after you for the deficiency from the foreclosure, if your mortgage was insured by FHA and if you used the property as your primary residence. But a lot depends on an individual lender and how much deficiency there is from foreclosure.
When you buy a home with an FHA mortgage, your loan is insured by the FHA. Thus, in case of any default on the loan, the FHA will insure the lender against any loss from the foreclosure. Generally, lenders do not come after you for the deficiency from the foreclosure, if your mortgage was insured by FHA and if you used the property as your primary residence. But a lot depends on an individual lender and how much deficiency there is from foreclosure.