If I just lost my job and will be unable to make my mortgage payments and the bank forecloses, if sells the house for less than my mortgage are we responsible for the difference?
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If I just lost my job and will be unable to make my mortgage payments and the bank forecloses, if sells the house for less than my mortgage are we responsible for the difference?
If so, how do we protect ourselves from this?
Asked on October 31, 2012 under Real Estate Law, Illinois
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Assuming that the loan on the property is the original loan (purchase money) and you lose the home in a foreclosure where it sells for less than what is owed on the loan, you would not be subject to deficiency judgment. However, if the loan is not purchase money, then you could be subject to a deficiency judgment.
In order to protect yourself, I suggest that you consult with a real estate attorney about the matter you have written where a short sale or conventional sale may be possible or a possible bankruptcy filing.
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