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I have an FHA loan in foreclosure, after the auction will I get a deficiency judgment from the bank for the remaining amount?
Anonymous4 views4 answers
My foreclosure is on November 3, 2013 , I have tried everything to keep my house but the investor did not approve the Loan Modification. I don't want to owe anything to the bank but they will not let me apply for a deed in lieu if I don't apply for a short sale first; I don't have time to apply for a short sale since the sale date is in less than 15 days according to the HAFA shortsale Form.
If I let the house go into foreclosure, will the bank get a deficiency judgment against me or not because is an FHA Loan? or Should I file for bankruptcy after the auction takes place? Thank you!
You have another problem that you haven't considered - being placed on the dreaded CAIVRS blacklist (yes this is the correct spelling!) Follow the link below to get more information about this program. Bottom line is that when you have a federally insured loan that goes bad without bankruptcy, you can be excluded from ever being able to obtain another real estate loan, federally insured or not. So file bankruptcy sooner rather than later to prevent being placed on this restrictive list. Hope this perspective helps!
The bank does not automatically get a deficiency judgment. They have to sue you to get that.
Should you file bankruptcy? You should get a consultation with a bankruptcy lawyer to answer that question. Many will offer an initial consultation to help you decide.
Once the foreclosure occurs, if there is a deficiency the bank will contact you to try to get you to pay it without the need of filing suit. If you do not pay, then they may sue you and will likely, eventually, get a judgment against you. However they may not sue or there may not be a deficiency at all. If you are considering bankruptcy, call some local bankruptcy attorneys and take advantage of the free consultations most of us offer and retain the one you are most comfortable with.
Filing bankruptcy now, will stay the eviction for several months. they may make an offer to move you out. You typically do not get your back. The deficiency is hardly every sued upon in this region. The 1099 for the deficiency is rare but happens. More likely than not, your credit will suck for 7 years.
