Foreclosed home in Michigan
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Foreclosed home in Michigan
I had a home foreclosed on 3 years ago.
I had 2 mortgages on the house, a small
and a big one. I settled with the bank
for a less amount on the small loan. I
never received anything from the bank
on the larger loan. I recently found
out they the bank is holding me
delinquent for the difference of what
the house was worth and the price it
was sold for.
My question is am I liable for that
money?
Asked on August 25, 2016 under Real Estate Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
When a lender forecloses on a mortgage, the total debt owed by the borrower frequently is greater than the foreclosure sale price. This difference is called a “deficiency". In most states, including MI, the lender can seek a judgment against the debtor to recover the amount of the deficiency. As a general rule, once the lender is awarded such a judgment by a court, it may collect this amount from the borrower and if the borrower does not voluntarily pay, the lender can garnish the borrower’s wages or attach the borrower’s bank account or lien other property owned by the borrower (real or personal).
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