Deficiency Judgments after a Non-Judicial Foreclosure
Posted By PremierLots on November 12, 2009
Yes!
It’s true!
If you’ve ever thought about, simply letting your home be sold at foreclosure to avoid a deficiency judgment, think again!
Maybe you’ve even been advised that if you can’t get your lender to waive the difference in a short sale or deed in lieu of foreclosure, to just have them foreclose; logic being that, at least this way in a non-judicial foreclosure they won’t be able to pursue you for the difference. THIS IS NOT THE CASE!
There’s been cases through the Washington State Court of Appeals that show with the proof of their decision- that junior lien holders (HELOC’s, 2nd line of credit, etc) CAN pursue you for a deficiency at foreclosure, even in a non judicial foreclosure proceeding.
Like everything else, there are exemptions and we would suggest that if you have questions regarding this topic to get in touch with an attorney or local HUD counselor and ask them about the statutes of limitations for mortgage deficiencies and your particular mortgage. There are no guarantees when trying to guess what your lender might do. It’s much safer to ask the questions up front and prepare yourself for your best plan of action, with backup plans lined up. Just another reason why attempting to short sale your house could be a much better financial decision than foreclosure.
Cheers!
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