If our investment property was foreclosed on, how long does the bank have to pursue us or forgive the debt?

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If our investment property was foreclosed on, how long does the bank have to pursue us or forgive the debt?

We foreclosed on our investment property 13 months ago and the bank auctioned the house a month later. We still have not received a 1099-c and just completed our taxes. How long does the bank have to send the 1099-C or pursue us for the difference?

Asked on March 2, 2012 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Depending upon the state that you live in, the statute of limitations for the lender to bring an action against you could be several years for a deficiency judgment. However, if the foreclosure sale was by way of non-judicial foreclosure versus judicial foreclosure (lawsuit filed for the foreclosure), under the laws of your state, you might not be subject to a deficiency judgment proceeding.

I suggest that you consult further with a real estate attorney as to whether your state makes a distinction between a judicial versus a non-judicial foreclosure.


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