Can Foreclosure Take My Assets?
Since a foreclosure technically means you are unable to pay the debt on your home mortgage loan, it’s fair to think that your lender may want to come for your other assets in order to recoup the debt. However, throughout the process of pre-foreclosure and foreclosure, this is not the case. The only asset of concern in a foreclosure is the home itself. Prior to a foreclosed home being auctioned off, the lender cannot try to take your other properties or assets.
However, after the home is sold, there is a scenario where your assets may be at risk. In some cases, when a home is auctioned off in a foreclosure, the home is sold for less than what the original homeowner owed on the mortgage. This difference in price is called the deficiency. If the lender wants the original homeowner to pay back that difference in amount owed, they must motion the courts for a deficiency judgment. This judgment holds the homeowner responsible for the remaining amount still owed after the home was sold.
For example: A homeowner purchased a house for $275,000, but was unable to pay their mortgage after paying off $10,000. The home was foreclosed, but only sold for $250,000. The lender may get a deficiency judgment on the homeowners to pay the additional $15,000 as well as interest fees and penalties.
If the deficiency is not paid, then the lender can begin to petition the court for wage garnishment, judgment liens, or bank levies. If granted, these court orders allow the lenders to begin to repay the debt by taking from your wage earnings, personal and business property, and potentially even savings and other bank accounts.
Worried you may be facing a foreclosure? No matter what stage you’re in in the foreclosure process, it’s never too early to contact an experienced foreclosure defense attorney to help you understand your options. Contact our office to speak with our experienced foreclosure defense attorneys to discuss your particular situation at length. Our office can be reached at (702) 998-1188, email@example.com or by scheduling a consultation online.