Can a mortgage company go after assets if our second home is foreclosed on?

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Can a mortgage company go after assets if our second home is foreclosed on?

We are currently facing foreclosure on our property. I am worried about a deficiency judgement if the home is sold for less than is owed at auction. If it is sold for less, what recourse does the creditor have? Can they go after assets (i.e. social security, CD’s, investments, life insurance policies)? We did not put up any of these up at time of signing. Also, we have an 80/20 loan with the same lender.

Asked on June 20, 2011 under Real Estate Law, Michigan

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As you are aware a lender may seek a deficiency judgment in the event that a property is foreclosed on and sold for less than the remaining amount of the mortgage (plus fees/costs). This is true for both a first and second mortgage. While such judgements are not allowed in all states, they are legal in MI. 

If such a judgement is obtained then all non-exempt assets are at risk. Exactly what assets are exempt varies from state-to-state. Typically however C'D', life insurance and most investments can be garnished; social security would be exempt.


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