If my home is in foreclosure and it is either sold as a short sale or foreclosed, do I have to pay the mortgage companies for any shortfalls?

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If my home is in foreclosure and it is either sold as a short sale or foreclosed, do I have to pay the mortgage companies for any shortfalls?

That is the difference in my mortgage and the short sale? What about foreclosure? Do I have any obligation to pay money back?

Asked on September 26, 2012 under Real Estate Law, Illinois

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Most mortgage contracts contain provisions which envision this type of situation.... if the house is sold and the sale does not cover the balance of the mortgage, then you are still liable for the balance of the mortgage which is unpaid.  The exception to this is if your mortgage said something different (which is almost never) or if you had an insurance policy which provided the gap coverage. 


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