Ifa rental property that I own is foreclosed on, can the bank seize my primary residence?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Ifa rental property that I own is foreclosed on, can the bank seize my primary residence?
I have an “investment” home in VA and the tenant is not paying any more and I can’t afford the home. I live in MD and have my primary home there, can the bank take it if my investment property gore into foreclosure?
Asked on March 29, 2011 under Real Estate Law, Maryland
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Banks can only take property--foreclose on it--if there is a security interest in or on that property *and* the borrower violates a term of a loan agreement in such way as to allow the bank to foreclose. So even if there is a mortgage with this bank on your primary home, as long as you do not default on that loan, the bank cannot take it--even if you default on another loan with the bank--except in the rare case where the loans are "cross collateralized" and your primary home was standing as a security for the investment property; if you agreed to that, then the bank could potentially foreclose. Otherwise, the most they can do is if they sue (such as for the unpaid balance of any loan on the investment property) and win and you still don't pay, they can look to put a lien on your primary home. The lien would be subordinate to any mortgage and would NOT let the bank foreclose; it would, however, be a cloud on title that would have to be satisfied before you could sell your primary home.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.