What happens to the deficiency in my foreclosure?
Let’s say you own a home and you’re facing a foreclosure.
The price of your foreclosed home is $150,000, but you owe $200,000.
What happens to that deficiency?
Well, you can be sued for that deficiency.
Many people are surprised by this, even lawyers.
They say that once the foreclosure happens you’re done, no one can sue you.
However, that’s inaccurate.
You need to know how much the foreclosure sold for if you’ve already been foreclosed on.
You can find that in the foreclosure deed.
(We’ll be glad to help you with this if you live in Alabama. You basically go to the probate court where your property was located and you can find the foreclosure deed.)
If the foreclosure sold for the same amount as what you owed, then you’re good. There is nothing owed.
However, if there is a deficiency it’s time to figure out what to do about it.
Because you could get collected on or even sued for this deficiency amount.
What to do if you believe you have a deficiency?
I would do the following:
- Call us so we can give you some advice and look at your options
- Pull your credit reports so you can see if the mortgage company is saying on your credit reports that you owe money or do not owe money
- Gather up any letters after the foreclosure — is anyone saying you still owe money?
- Is anyone calling you saying you owe money?
The bottom line is we want to look at your total picture to see if there is anything to worry about regarding a deficiency. Hopefully not but if there is, we can help you come up with a short term or long term plan.
Hope this is helpful to you!
If you have any questions, feel free to get in touch with us.
We would be glad to answer any questions you may have or help you figure out the best course of action.
You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.
We look forward to chatting with you!
Thanks for reading, and have a great day.