Do banks typically sue after foreclosure sale to recoup losses? (sublet, leasing)
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This is such a good thread as so many are facing the same thing or some variant of the same. I've been told, don't know whether it's true or not, that they can't come after retirement accounts - IRA's. I'd like to know whether that's true or not. Also, if your other assets are in a trust but the property being foreclosed is not in the trust's name, could they come after the trust and assets therein? Any attorneys here? Thanks!
This is such a good thread as so many are facing the same thing or some variant of the same. I've been told, don't know whether it's true or not, that they can't come after retirement accounts - IRA's. I'd like to know whether that's true or not. Also, if your other assets are in a trust but the property being foreclosed is not in the trust's name, could they come after the trust and assets therein? Any attorneys here? Thanks!
No.
The best way in this scenario....you KNOW that you're losing the house....
.....is to short sell and the bank forgives the debt. You'll have to pay taxes on the amount of debt forgiveness.
That's considered income.
Remember though that banks can take cash out of your traditional checking/savings accounts. This includes credit card debt.
I do not understand. I did nothing wrong to be in this position. I did not borrow beyong my means. I was qualified for 500K but opted for 330K. I have never defaulted on any loan I have taken. I have a 770 credit score.. I did not ask for my property value to lose %40 in two years. If I knew I was gambling when I purchased this damned house, I would have rather gone to vegas, at least my odds of winning would have been higher. On top of that I am not even living in the house, I have relocated.. I can not even refi it because of the loan/value ratio. I am stuck in a fixed high rate and i am losing sleep over this. An if I happened to be in a state like california they would not have come after me.. in good times they were the ones who made all kinds of money on their properties and when things go south, they can simply walk away with no consequence. I am losing my mind over this. It is now not a matter of being able pay or not.. It is does not make sense to continue paying on continually depreciating asset with no light at the end of the tunnel. I feel stupid.
Anytime you buy a house, you're gambling that you'll be staying at that location for more time than the break-even point on buying-vs-renting. Your assumptions on the property appreciating rather than depreciating were simply wrong. The probability has just been much higher that housing prices would go up.
You really have 2 good options. You can gamble yet again that housing values will go up -- maybe pray for that hyperinflation thing that economists say might be coming in the next couple years -- and just hold the property for a while. If you can find renters, you might check with a CPA on whether you can convert the property from your primary residence to a rental property. You can deduct a capital loss on a rental property -- not on a primary residence.
The other option is to sell the property for whatever you can get and anticipate a $132K loss. If you don't have the 132K -- you need to find a way of financing it. Financing 132K is better than 330K. You've basically already lost the money -- this is just making it official. By selling the house, you no longer have the expenses (taxes, insurance, utilities, etc).
The options of foreclosure, bankruptcy, etc are not good ones. The foreclosure option was detailed on Yahoo this week. They reported how banks in states like MI have the option for waiting for up to 10 years to try collecting on the amount you still owed and can get also get the interest on that money. You ruin your credit rating and have a debt hanging over your head for years. The debt is your obligation -- not the banks. Nobody forced you into it. I had to assume the loss on my property when I moved -- it's not fair that others get to walk away without consequences.
Quote:
Originally Posted by tracko
I do not understand. I did nothing wrong to be in this position. I did not borrow beyong my means. I was qualified for 500K but opted for 330K. I have never defaulted on any loan I have taken. I have a 770 credit score.. I did not ask for my property value to lose %40 in two years. If I knew I was gambling when I purchased this damned house, I would have rather gone to vegas, at least my odds of winning would have been higher. On top of that I am not even living in the house, I have relocated.. I can not even refi it because of the loan/value ratio. I am stuck in a fixed high rate and i am losing sleep over this. An if I happened to be in a state like california they would not have come after me.. in good times they were the ones who made all kinds of money on their properties and when things go south, they can simply walk away with no consequence. I am losing my mind over this. It is now not a matter of being able pay or not.. It is does not make sense to continue paying on continually depreciating asset with no light at the end of the tunnel. I feel stupid.
They can. I do not know if they will. The problem is they (I believe) have up to 7 yrs to pursue any default. I think right now banks are pretty busy. I can see a bank laying low for a few years and then seeking people out. A family member of mine had a credit card from 6 years ago. They are now coming after him for the balance.
My friend gave her home back in September of 09. She paid 85k for the house in 2004. It is now worth 11k. She filed bankruptcy and gave the house back. She has since been discharged and everything went through but yesterday she got a certified letter from her mortgage company stating they will pursue foreclosure if she doesn't respond. She took the letter to her attorney and he was miffed. They called the bank and they had no clue the house was given back and included in a bankruptcy! I think banks are over loaded with defaults. I think when the smoke clears is when they will start seeking people out.
Location: Grosse Ile Michigan and Sometimes Orange County CA
14,890 posts, read 18,978,765 times
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Bankruptcy is only useful in most cases if you have little or no income. If you have a good income, it may not help you.
You can sometimes do workouts with the lender. It depends on your situation and what you want. Some banks have finally realized that they are better off if they have someone living in all of htese houses, Thus they ay work out a deal, foreclose and rent back to you with an option to buy later, ertc. Some lenders just need to get what cash they can. Thus they may agree to a short sale, modification, deed in lieu. You may be able to get legal help with government money to pay for it. Where do you live?
Anytime you buy a house, you're gambling that you'll be staying at that location for more time than the break-even point on buying-vs-renting. Your assumptions on the property appreciating rather than depreciating were simply wrong. The probability has just been much higher that housing prices would go up.
You really have 2 good options. You can gamble yet again that housing values will go up -- maybe pray for that hyperinflation thing that economists say might be coming in the next couple years -- and just hold the property for a while. If you can find renters, you might check with a CPA on whether you can convert the property from your primary residence to a rental property. You can deduct a capital loss on a rental property -- not on a primary residence.
The other option is to sell the property for whatever you can get and anticipate a $132K loss. If you don't have the 132K -- you need to find a way of financing it. Financing 132K is better than 330K. You've basically already lost the money -- this is just making it official. By selling the house, you no longer have the expenses (taxes, insurance, utilities, etc).
The options of foreclosure, bankruptcy, etc are not good ones. The foreclosure option was detailed on Yahoo this week. They reported how banks in states like MI have the option for waiting for up to 10 years to try collecting on the amount you still owed and can get also get the interest on that money. You ruin your credit rating and have a debt hanging over your head for years. The debt is your obligation -- not the banks. Nobody forced you into it. I had to assume the loss on my property when I moved -- it's not fair that others get to walk away without consequences.
Sparrow does it mean that we have to stay in a particular place for 20 years to sell the property for the amount we did bought.I tell you one thing and that is that life has become too ridicilous and we got screwed by our own government.Also don`t get upset by the positive militants in here.They are a phony existence.I thank you for some well written posts.
There is no value in Michigan`s real estate.I mean none,whatsoever.This place will be just a distant memory as it has turned that way.It is too hard right now.That is why i am squating and not even scooping deals at 50-70k.Why?Because there is not a damn thing to do!
what if noboby comes after you for whats owed about 8yrs after the sale. only thing is,it's still on the credit report.is there a time limit to come after you.
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She took the letter to her attorney and he was miffed. They called the bank and they had no clue the house was given back and included in a bankruptcy! 
I think banks are over loaded with defaults. I think when the smoke clears is when they will start seeking people out.
