If a primary residence is changed fromone state to another, can a bank witha judgement make a claim against property inthe new state?

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If a primary residence is changed fromone state to another, can a bank witha judgement make a claim against property inthe new state?

NJ to DE. Foreclosrue or short sale.

Asked on December 6, 2010 under Real Estate Law, New Jersey

Answers:

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

Answered 10 years ago | Contributor

When a property is sold at auction (or is short sold) for less than the remaining amount of any mortgage on it (plus fees/costs), in many states a lender may go to court and obtain what is called a "deficiency judgment".  If this judgement is legally obtained (ie. is allowed in the state in which it is sought), then like any other judgement it may be enforced against the debtor in another state.

Generally every state recognizes the judgements of every other state.  A judgment rendered in a "sister" state is also referred to a "foreign judgment." 47 states (including NJ) and the District of Columbia have adopted the Uniform Enforcement of Foreign Judgments Act (UEFJA), which requires states to give effect to the judgments of other states, as long as an exemplified copy of the foreign judgment is registered with the clerk of a court of competent jurisdiction, along with an appropriate affidavit.

Note:  Sometimes a lender will waive their right to a deficiency judgment in a short sale.  See what you can negotiate.


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