Mortgage Deficiency Protection
Deficiency judgements are on the rise. When the value of real estate drops below the loan amount, home owners and real estate investors are in a precarious legal situation. The complexity comes from varying state law on loan recourses. Original promissory notes and second mortgages have different loan recourses, which will differ in jurisdictions – those using “lien theory” of mortgages allow for deficiency judgments against the borrower(s).
Protect yourself against Mortgage Deficiency Today
Are You At Risk?
This depends on how collectible you are. If you have regular income or other assets the odds on collection action against you are high. This could lead to bankruptcy filing, however if that is not an option, your only resort is to seek settlement. In either event this will result in attorney fees and legal costs. Negotiating with a creditor means that you will have to navigate exception procedures to protect your income and other assets – that is if you are not already protected.
The Problem with Mortgage Deficiency Judgments
There’s no time for maximizing the value in your home. Short sales happen fast and the values of homes depend on how many individuals are making cash offers at the time, which can vary from day-to-day or week-to-week. Judiciary procedures of foreclosure allow for judgements in favor of the creditor in the amount of the loan principal deficiency, plus interest, plus legal fees – minus the amount of a foreclosure sale. Taxes may also apply to your situation on the forgiven amount.
How Deficiency’s are Collected
- Garnishment of Wages
- Bank Account Levy
- Judgment Leins
If you are upside down on your loan, in foreclosure or facing it, we can guide you through your options on how you can protect yourself against judgments and increase your negotiating power in a settlement. Call today.