If you have gone through foreclosure or shortsale...

[Tabrett]

...did you have to pay the remaining balance on your house after it was sold?

[Denisemomof4]

I haven't been through it but we sold my parent's house, short sale, after my parents passed away. B of A accepted the short sale and we didn't have to pay any difference.

 

From what I understand in the foreclosure process through my sister, you're not responsible for the difference.

[chiguirre]

This depends on your state's laws. In some states, foreclosure satisfies the debt, in others the debtor must pay the difference. Of course, there's also the issue of whether the bank has the correct paperwork to foreclose at all. In some cases they don't and they've fraudulently altered (or created) loan documents to foreclose. If another bank turns out to own the loan, you may or may not be liable to them too.

 

:grouphug:

[chiguirre]

I saw you're in SC. It seems that the debtor still owes the balance after the foreclosure:

 

SECTION 29-3-660. Deficiency judgment.

In actions to foreclose mortgages the court may adjudge and direct the payment by the mortgagor of any residue of the mortgage debt that may remain unsatisfied after a sale of the mortgaged premises in cases in which the mortgagor shall be personally liable for the debt secured by such mortgage and if the mortgage debt be secured by the covenant or obligation of any person other than the mortgagor the plaintiff may make such person a party to the action and the court may adjudge payment of the residue of such debt remaining unsatisfied after a sale of the mortgaged premises against such other person and may enforce such judgment as in other cases.

 

Here's the link to the SC Code of Laws:

 

http://www.scstatehouse.gov/code/t29c003.htm

[Prairie~Phlox]

Also, I remember talking with friends before that you can be taxed for the amount that the bank ends up eating up....not sure how true this is, but thought I would point it out.

[journeytolily]

We short-saled our house in SC this year, after DH's company moved us to MI. And now we have to pay over $30,000 on the HELOC. So, yes, they WILL come after the balance after a short sale.

 

Veronica

[....]

There's a lot of chat about this on places like the dave ramsey forums. Also, I recommend (and recommend is putting it lightly) getting an attorney. We had a car repo about 8 years ago and the attorney did everything but save our lives. He was incredible.

[K-FL]

:iagree: We had no choice but to get an attorney since even though we had a short sale offer in the process, the foreclosure process kicks in after xx months of no payment.

 

In FL, the laws are different as to what happens after a foreclosure or a short-sale. You'll need to get SC info. Also, check on owing income tax (Fed & State) on the balance that's "forgiven."

[dancer67]

If you have an approved short sale, then no.

 

If you foreclose, then what will happen is you get what is called a "deficiency judgement" and you are responsible for the balance. Not only that, you get to pay the lovely "capitol gains" tax on money you didn't even recieve.

 

Foreclosure would be a last option. Do an approved short sale if at all possible.

 

If you have to go the foreclosure route, I would file for bankruptcy. Then, you are not legally responsible for the balance.

 

BTDT on the foreclosure thing. It wasn't fun at all.

 

It was a while ago, and we are now in another home. But I would have filed for bankruptcy then if I would have known.

[Renee in NC]

I saw you're in SC. It seems that the debtor still owes the balance after the foreclosure:

 

SECTION 29-3-660. Deficiency judgment.

In actions to foreclose mortgages the court may adjudge and direct the payment by the mortgagor of any residue of the mortgage debt that may remain unsatisfied after a sale of the mortgaged premises in cases in which the mortgagor shall be personally liable for the debt secured by such mortgage and if the mortgage debt be secured by the covenant or obligation of any person other than the mortgagor the plaintiff may make such person a party to the action and the court may adjudge payment of the residue of such debt remaining unsatisfied after a sale of the mortgaged premises against such other person and may enforce such judgment as in other cases.

 

Here's the link to the SC Code of Laws:

 

http://www.scstatehouse.gov/code/t29c003.htm

 

It isn't just state law, it's also based on the bank and what they think they can get out of you. In our case, no, the bank did not come after is for the balance. It wouldn't have mattered anyway - we didn't have anything and our income is (still) very, very low. Even if they had gotten a judgement - who cares? If you have nothing, judgements aren't worth the paper they are printed on (NC doesn't garnish wages and FL has income limits which we don't come anywhere near meeting.) This was just our situation, however - yours may vary. We did *not* go legally bankrupt because it would have been a waste of money in our case. We may still, but at this time it isn't an issue.

 

Also, I remember talking with friends before that you can be taxed for the amount that the bank ends up eating up....not sure how true this is, but thought I would point it out.

 

No federal tax anymore on the amount. Don't know about SC state tax.

[forty-two]

We are attempting a shortsale (over a year on the market and the only offer fell through :glare:), and the deal we struck with our mortgage company was that they'd forgive half the remaining balance and write us a seven-year loan for the other half. Personally I'm happy with this, as it seems reasonably fair and also doable on our side. Now, if only our house would *sell*....

[jld]

Just want to offer :grouphug: for anyone going through this.