What is out financial liability after a foreclosure?

UPDATED: Sep 20, 2011

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What is out financial liability after a foreclosure?

My husband filed for bankruptcy and we kept our home. He then filed for a modification, which was approved and we’ve being paying for several months already (almost a year). Yet we are now facing the fact that again I lost my job and we cannot afford our mortgage any longer. All we can afford is to rent. However, our fear is having loan deficiencies, taxes, or any other fees, if the house forecloses. Can the lender still makes us responsible for payments? Can the lender freeze our bank accounts?

Asked on September 20, 2011 under Real Estate Law, Florida


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

Answered 11 years ago | Contributor

First of all, when a home is foreclosed and later auctioned/sold for less than the remaining mortgage balance (plus costs/fees), there is a "deficiency". That means that the lender is still owed money. In many states. FL included, a lender can go to court obtain a "deficiency judgement". If it is successful in be awarded such a judgment, the lender can then garnish (i.e. seize) any non-exempt assets, such as bank accounts (exempt assets are those that are legally protected from garnishment; for example Social security benefits).

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