Do FHA loans allow a deficiency Judgement?
Do FHA loans allow a deficiency Judgement?
Answer: The simple answer is no: the Federal Housing Administration (FHA) does not pursue deficiency judgments against foreclosed homeowners. those who have previously defaulted on one or more FHA-insured mortgages; or. homeowners who have chosen to strategically default.
How does a deficiency judgment work in California?
The deficiency judgment allows the lender to collect the debt through regular collection methods, like garnishing wages or levying a bank account. Read on to find out when your lender could get a deficiency judgment against you after a California foreclosure, and what happens to a deficiency in a short sale or a deed in lieu of foreclosure.
Can a foreclosure in California lead to a deficiency?
In most residential foreclosures in California, the lender can’t pursue the homeowner for a deficiency. In some states and in certain situations, you might owe your mortgage lender money after a foreclosure sale of your home. This happens when the foreclosure sale doesn’t bring in enough money to pay off your debt.
How is a deficiency judgment used in foreclosure?
Example. Say the total debt owed on the first mortgage is $700,000, but the home sells for $650,000 at the foreclosure sale. The deficiency is $50,000. In some states, the lender can seek a personal judgment, which is called a deficiency judgment, against the borrower to recover the deficiency.
What does a deficiency amount on a mortgage mean?
Generally, the deficiency amount is the difference between the fair market value and the total mortgage debt. To avoid liability for the deficiency, ask the lender to agree that the transaction completely pays off the debt.
The deficiency judgment allows the lender to collect the debt through regular collection methods, like garnishing wages or levying a bank account. Read on to find out when your lender could get a deficiency judgment against you after a California foreclosure, and what happens to a deficiency in a short sale or a deed in lieu of foreclosure.
In most residential foreclosures in California, the lender can’t pursue the homeowner for a deficiency. In some states and in certain situations, you might owe your mortgage lender money after a foreclosure sale of your home. This happens when the foreclosure sale doesn’t bring in enough money to pay off your debt.
Example. Say the total debt owed on the first mortgage is $700,000, but the home sells for $650,000 at the foreclosure sale. The deficiency is $50,000. In some states, the lender can seek a personal judgment, which is called a deficiency judgment, against the borrower to recover the deficiency.
Generally, the deficiency amount is the difference between the fair market value and the total mortgage debt. To avoid liability for the deficiency, ask the lender to agree that the transaction completely pays off the debt.