Former homeowners in the United States who thought they were avoiding foreclosure by arranging a short sale are now receiving notices that they owe the remaining balance on their original home loan. Short sales can occur months or years before receiving notifications of additional amounts due. When your home has been foreclosed on and auctioned off, you may receive a notice showing that your home sold for well below market value at auction, and you owe the remaining balance on the mortgage. This scenario is also becoming more common after short sales.
Deficiency Judgement
The lender may receive a deficiency judgment ordering you to pay the balance between what the home sold for and what is still due on the mortgage loan. Even if the bank approves the short sale, some homeowners believe that any unpaid balance will be eliminated, and nothing else will be due on the mortgage. In some cases, this is true, but many financial institutions are coming back after the borrower months after the home has been sold in a short sale. There is no guarantee that you not you will not be served with a deficiency judgment after a short sale or foreclosure.
Filing bankruptcy may be the only way to ensure that you will not receive a deficiency judgment when you have given up your home. During bankruptcy, if you give up all interest in your home, you will have no future liability regardless of how much the home is sold for.
If you are falling behind in your debt, and no longer wish to carry the burden of a home mortgage, contact a Hidalgo County bankruptcy attorney to find out how you can get a fresh financial start.