Posted on: 07th Mar, 2009 06:46 am
What happens to the 2nd mortgage after a sheriff's sale and the bank bid the amount on the first mortgage? Can they sue for a deficiency judgement? Do they usually do this?
hi guest,
the second mortgage holder might sue you for the deficiency amount. it depends on the laws of the state where the property is located. in some states, the lenders are not allowed to sue a homeowner to recover the deficient amount, while some states do allow it. thus you need to check your local laws in this regard.
however, the lenders know that a person who has lost his house to foreclosure doesn't have much resources to pay off the deficient balance and thus, obtaining a deficiency judgement is worthless. moreover, the time and costs it involves often discourage the lenders from sueing the homeowner.
the second mortgage holder might sue you for the deficiency amount. it depends on the laws of the state where the property is located. in some states, the lenders are not allowed to sue a homeowner to recover the deficient amount, while some states do allow it. thus you need to check your local laws in this regard.
however, the lenders know that a person who has lost his house to foreclosure doesn't have much resources to pay off the deficient balance and thus, obtaining a deficiency judgement is worthless. moreover, the time and costs it involves often discourage the lenders from sueing the homeowner.