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

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


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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