Posted on: 03rd Apr, 2009 01:12 pm
Our property balance is 580K, Second mortgages and leans against property are 540K. The home is probably worth in todays market 675K.
Foreclosure wipes out all debt mtg & leins?
Deed in lieu wipes out just mortgage?
Please clarify this for me as when I read previous posts Im still unclear.
If the property goes to foreclosure the leins can still com after us?
Foreclosure wipes out all debt mtg & leins?
Deed in lieu wipes out just mortgage?
Please clarify this for me as when I read previous posts Im still unclear.
If the property goes to foreclosure the leins can still com after us?
Hi JACKWALINE,
Neither foreclosure nor a deed in lieu wipes out all debts and liens. In foreclosure, if any deficient amount arises on the first mortgage out of the sale of the house, the first mortgage holder will come after you for the money. The second mortgage holder can place a lien or obtain a judgment against you in case you are unable to pay the debt.
In case of a deed in lieu, the first mortgage holder generally forgives the deficient amount that arises after the sale of the house. They won't come after you for that money. However, the second mortgage holder can still obtain a judgment against you or place a lien. They can charge off your debt. But that does not mean the debt would be forgiven. It means you will be required to make the payments to a collection agency instead of the actual second mortgage holder.
Neither foreclosure nor a deed in lieu wipes out all debts and liens. In foreclosure, if any deficient amount arises on the first mortgage out of the sale of the house, the first mortgage holder will come after you for the money. The second mortgage holder can place a lien or obtain a judgment against you in case you are unable to pay the debt.
In case of a deed in lieu, the first mortgage holder generally forgives the deficient amount that arises after the sale of the house. They won't come after you for that money. However, the second mortgage holder can still obtain a judgment against you or place a lien. They can charge off your debt. But that does not mean the debt would be forgiven. It means you will be required to make the payments to a collection agency instead of the actual second mortgage holder.