What happens if I don’t pay my mortgage?

UPDATED: May 29, 2012

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What happens if I don’t pay my mortgage?

If I received a loan (let’s say $200K) from the bank to purchase a house that cost the same amount as the loan. Then 5 years later, I’m unable to pay the mortgage and the home value is almost half ($100K). What happens next? I realize that the bank owns the home and will take it from me and may do a short sale. However, will I still be liable for the rest of the money borrowed from the bank, penalties and such?

Asked on May 29, 2012 under Real Estate Law, Florida


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

So you realize that the house will go in to foreclosure and that the bank will try and sell it and it will come up short. The difference between the loan amount and the sale amount is known as a deficiency judgement and that is what you need to avoid as the bank will indeed come after you for that plus fees.  So you need to get help either surrendering the house to the lender with what is known as a deed in lieu of foreclosure or having the bank agree to a short sale you do yourself BUT they MUST waive the deficiency.  Get help.  Good luck.

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