Strategic default

UPDATED: Apr 16, 2016

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Strategic default

I own a house in California that I borrowed a home equity on about 10 years ago.
The home has since devalued and I want 2 walk away from it. I have real estate
assets in other states. Can the mortgage company sue me for difference in short

Asked on April 16, 2016 under Real Estate Law, Tennessee


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, in your state, unless the lender agreed (in writing) to accept the proceeds of the short sale as payment in full of the mortgage or equity loan/line, they can sue you for any amounts not paid (any "deficiency") from either a short sale or foreclosure & sheriff's sale of the property. You are liable for the full amount of the loan and must pay it; so if it's only partially paid by a sale, they can come after you for the balance (again, unless they agreed to accept the proceeds as payment in full).

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 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.

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