Strategic default

I own a house in California that I borrowed a home equity on about 10 years ago.
The home has since devalued and I want 2 walk away from it. I have real estate
assets in other states. Can the mortgage company sue me for difference in short
sale.

Asked on April 16, 2016 under Real Estate Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, in your state, unless the lender agreed (in writing) to accept the proceeds of the short sale as payment in full of the mortgage or equity loan/line, they can sue you for any amounts not paid (any "deficiency") from either a short sale or foreclosure & sheriff's sale of the property. You are liable for the full amount of the loan and must pay it; so if it's only partially paid by a sale, they can come after you for the balance (again, unless they agreed to accept the proceeds as payment in full).


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