Foreclosure

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Foreclosure

If the bank forecloses on a property can the bank file a lien against other
properties not listed as collateral on the mortgage?

Asked on February 15, 2017 under Real Estate Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

It cannot directly file  a  lien against them. BUT if the property, after being foreclosed and sold at foreclosure (sheriff's) sale or auction, brings in less than the remaining balance on the loan, the bank could sue you  for that unpaid balance or "deficiency." If they do and get a judgment against you for the money, if you don't pay the judgment, they could take various collections steps against you, such as possibly garnishing wages or, in answer to your question, putting a lien on your other property. So foreclosing on property 1 does not, by itself, let them put a lien on non-collateral properties 2, 3, etc.; but suing you and getting a monetary judgment which you do not pay could let them apply for a lien.


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