What are the consequences beyond damaged credit for defaulting on a mortgage?

Get Legal Help Today

 Secured with SHA-256 Encryption

What are the consequences beyond damaged credit for defaulting on a mortgage?

My mortgage is under water about $70,000. Worse yet I have new neighbors with pit bulls and a $500 trailer and 10 cars coming and going and we are on the end of a dead end road. My house is probably not going to sell. I have enough resources to buy another house while I still own this one, but will not be able to afford two house payments. What are the consequences if I proceed to let it go into foreclosure?

Asked on June 15, 2011 under Real Estate Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Minnesota allows "definciency judgments" in some circumstances (it depends on part on how exactly the lender forecloses). This means that after property is foreclosed upon, if at foreclosure sale or auction, it does not bring in enough money to pay off the remaining balance of the mortgage, the lender has the right to sue the mortgagee (the homeowner) for any "deficiency"--that is, for anything not paid off. So if you mortgage is underwater by $70k, it may be that an auction (since those often go lower, especially in this market), the home would sell for even less and there's be $80k to $100k left on the mortgage. While the lender does not have to sue you for that money, it appear that it might have the right to do so.


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