What are the ramifications of a foreclosure?

 A foreclosure sale can result in a "deficiency judgement".  This is a judgement that is against a borrower whose foreclosure sale did not produce sufficient funds to pay the remaining mortgage balance(s) in full.  This judgement will be reflected on your credit report, and a judgement lien can also be placed on any subsequent properties you purchase or already own. Typically with a deficiency judgement, until this is paid off you will not be able to purchase another home through a lender. Note:  The above is just a general summary.  In MI, there are 2 different types of foreclosures - a sheriff's sale and a judical foreclosure; also, in your situation, there is both a 1st and 2nd mortgage.  In light of all of this you should speak to an attorney in your area as to your liability under specific state law.