Can the bank come sue me for a second mortgage after a non-judicial foreclosure?

Get Legal Help Today

 Secured with SHA-256 Encryption

Can the bank come sue me for a second mortgage after a non-judicial foreclosure?

I can only find answers pertaining to a single loan. In WA state.

Asked on July 13, 2011 under Real Estate Law, Washington

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

That is a very good question and the answer depends upon the law of the State that you reside in which is Washington.

The answer to your question would center upon whether or not the second mortgage is a "purchase money" for the acquisition for the property that was foreclosed upon and whether the proeprty foreclosed upon was a residence or not. A "purchase money" loan is a loan used by a person to acquire property as opposed to a refinance and typically a home to live in for personal use by the borrower.

Several years ago lending institutions had dual loans for residence purchase, a first and a second where the first loan secured by a mortgage typically was much larger than the second loan, usually an 80% to 20% ratio.

If the second trust deed was a "purchase money" loan used in the purchase of a residence and the second trust deed foreclosed upon the property by way of a non-judicial foreclosure as opposed to a lawsuit filed in Washington State court, then most likely the bank cannot come back and sue you for the balnce owed on any shortfall after the residence's resale.

Also, some States have statutes stating that in a non-judicial foreclosure by a mortgage holder as to any property precludes the bank holding the mortgage, first, second, third or otherwise from suing the property owner for any balance owed after the property's resale.


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.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption