If a house is put in foreclosure, what is the legal obligation of the defaulter to the bank if the home is sold for less than the defaulted loan?
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If a house is put in foreclosure, what is the legal obligation of the defaulter to the bank if the home is sold for less than the defaulted loan?
Asked on July 11, 2012 under Real Estate Law, Wyoming
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
I am sorry for the situation. If the hosue is sold for less than the mortgage amount then there is what is known as a "deficiency" and the lender may be able to come after you for the funds. They take what is known as a "deficiency judgement" against you and then they can collect by the means allowed under your state law. Please, please go and speak with some one about options even at this [possible late date. You can do a deed in leiu of foreclosure or a short sale but asking that the lender waive the deficiency. Good luck.
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