Increasingly aggressive mortgage lenders are seeking to collect deficiencies from former home owners who walked away from their properties or sold them in short sales.
Many states, including Florida, give mortgage holders as long as five years to seek a deficiency judgment. If granted, the bank gets up to 20 years to collect and the option to renew for another 20 years if the debt isn’t paid.
About one-third of U.S. states, including California and Arizona, prohibit collection efforts after foreclosure, but home owners usually waive that protection in a refinance.
Most states allow collection on unpaid home-equity loans.
Banks are most likely to try to collect from people who walk away from a property on which they are still making payments.
“The bank is going to pull your credit report, and if you’re current on your other bills they are going to come after you and potentially ruin you,” said Larry Tolchinsky, a Florida real estate attorney.
Source: Bloomberg, Kathleen M. Howley (01/28/2010)
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- PropBob
- Metro Atlanta, Georgia, United States
- Realtor and Real Estate Investor - Revitalizing metro Atlanta, One Property at a Time. www.dovcar.com
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Blog Archive
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2010
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January
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- Fannie to Offer Closing Cost Aid on Foreclosures
- Home Prices Rise Unexpectedly in November
- Banks/Mortgage Lenders Seek Payback from Walkaways
- Ten Inexpensive Ways to Wow Buyers
- No Picket Fence on Some Men's Horizon
- 6 Surprising Facts About the Buyer Tax Credit
- Harder to get an Uncle Sam mortgage
- FHA To Toughen Down Payment Rules
- FHA Property Flipping Waiver
- Downsizing your Home? The Tax Credit is For You Too!
- Atlanta 37th among home price reductions as trend ...
- Record Number of Foreclosures in 2009
- Last chance to refinance below 5%
- Principal Cuts May Prevent Foreclosures
- Foreclosures Weigh on Home Appraisals
- Census: Americans Stayed Put in 2009
- 5 Home Remodeling Trends for the New Year
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January
(17)
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