After the Foreclosure: Deficiency Judgments and Taxes
If you are facing foreclosure, or have lost your home through foreclosure, you might still owe your mortgage lender money after the sale. This happens if the foreclosure sale price is less than the amount remaining on your mortgage - it's called a "deficiency." Whether your lender can go to court and get a judgment for the deficiency, and then collect it, depends on state law. Below you can find the law on deficiencies in each of the 50 states.
Deficiencies play a role in short sales too. In most states, you are on the hook for a deficiency after a short sale. But there are ways you can avoid or handle a deficiency.
And for both foreclosures and short sales, you might owed the IRS some money.
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Deficiency Judgments: Will You Still Owe Money After the Foreclosure?
When deciding whether to fight a foreclosure, take steps to avoid it, or just walk away, you’ll want to know whether you’ll be stuck for the money that the lender loses because of your default. This is usually measured as the difference between what the lender ends up with at the end of the day and
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Can Foreclosing Lender Get Deficiency Judgment After Using Robosigned Documents?
If no one really reviewed your mortgage documents before initiating foreclosure proceedings, then foreclosing on your home and asking you to pay any amount still owed may be legally unfair.
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How to Avoid a Deficiency Judgment
The laws of most states allow lenders to go after borrowers for a deficiency—that is, the amount by which the foreclosure sale proceeds fall short of the loan amount. However, a few states protect homeowners from liability for deficiencies from mortgages on residential homes that were used to purchase
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How Do Mortgage Lenders Collect Deficiency Judgments?
Once a mortgage lender has obtained a deficiency judgment against you, it can then proceed to collect on that judgment.
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Personal Liability for Mortgages Held by an LLC or Corporation
One of the primary reasons that small business owners choose to form a limited liability company (LLC) or corporation is to avoid being held personally liable for debts should the business become u
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- Your First Foreclosure Decision: Should You Stay or Should You Go?
- Fast-Track Foreclosures of Abandoned Homes
- Foreclosure Rescue Scams
- Foreclosure: Second Mortgages and HELOCs
- Foreclosure Terminology
- Foreclosure & the Military
- Foreclosure Timelines
- New Foreclosure Laws
- Protecting Your Home and Property During Foreclosure
- Reverse Mortgages: Foreclosures & Scams
- Understanding Mortgages & Deeds of Trust
- Your First Foreclosure Decision: Should You Stay or Should You Go?
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