Home foreclosure (Jackson: sale, house, salary)

[gillianking]

If your home is forclosed can your wages be garnished?

[JacksonPanther]

Originally Posted by gillianking

If your home is forclosed can your wages be garnished?

Why would they garnish your wages? If they foreclosed that means they get the house back. There's no claim against your salary.

In theory, the bank could foreclose, sell the house, then sue for the difference between what you owed and what the house sold for. But I think this rarely or never happens.

[maui-intoxicated]

Originally Posted by JacksonPanther

Why would they garnish your wages? If they foreclosed that means they get the house back. There's no claim against your salary.

In theory, the bank could foreclose, sell the house, then sue for the difference between what you owed and what the house sold for. But I think this rarely or never happens.

It's happening to a co-worker of mine right now. They caught up to him when he jumped states about 6 years later. He stated exactly what you are saying "I am getting sued by the bank for the difference of my home" plus some other fees related to the sale and the time it was foreclosed but still in his name.

The government is slow.

[EarlVanDorn]

In most states, when the home is foreclosed the price the home brings at the foreclosure sale may not be enough to cover the amount owed to the bank. For example, a house with a $200,000 might only sell for $50,000. The bank is entitled to a deficiency judgment for this amount. So it sounds like your friend got a deficiency judgment against him. This judgment can be enforced in any state on the service of a garnishment notice.

JacksonPanther is right that banks often don't go after deficiency judgments in power of sale foreclosure states. It would take an expensive separate court action. But in a judicial foreclosure the case is already open, and the deficiency can be granted as part of the court's oversight of the sale. These judgments are common.