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Deficiency Judgment |
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My friend is in a bad loan with a very high interest and is foreclosing on her home. If she goes through the foreclosure process can the bank take away her vehicles, any other property she owns, or deny her use of her existing credit cards? or does this just apply to that particular property? |
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The part of a mortgage loan that never was repaid because the foreclosure auction didn't bring enough is known as the "deficiency". I can't say what will happen in your friend's case. Depending on state law, and depending on what the lender wants to do, there are three possibilities: the creditor, the lender, may automatically receive a judgment for the deficiency, or the creditor may go to court to ask for a deficiency judgment, or state law may not allow deficiency judgments if the property is the borrower's home. If the creditor does get a deficiency judgment, it could be placed as a lien against your friend's other property. I don't think it would have any automatic effect on her credit cards. |
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Edith
Originally published on August 11, 2007 |
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