Ms. Olefson, I did a little research to find you. I also notice you have done some informational spots on Fox.
I sold my primary home 2 years ago. In doing so, the first mortgagee was paid in full (~$450k)and the 2nd received about 25% of their indebtedness(~$600,000). I had an attorney but I now need to review my current situation relative to the following:
a) what to do about the remaining indebtedness
b) make sure I am protecting other assets
c) other options
Thanks so much in advance for your response.... Dan A
Dear Dan – What you are referring to is called the deficiency judgment – the difference between what the bank received when the home was sold and what you owed. Some states allow deficiency judgments, others do not. And still others allow them on non-homestead property. Some lenders and Fannie, Freddie, FHA, at one point began a policy of not pursuing deficiency judgments. Others had to agree to not pursue them under the terms of legal settlements they entered. Another factor everyone should be aware of is that each state has its own rules and timeframes regarding pursuing deficiency judgments (in other words if the bank doesn’t pursue you after “x” years they no longer can). In terms of protecting other assets, the time to do that is before you have a concern they will be pursued for repayment of a debt. If you take action afterwards (ie transfer assets, etc) the actions may be voided as fraudulent actions to avoid a debt. I hope that helps!