What Happens If I Foreclose On My House?
My husband and I would like to let our house go because it needs too much work and we are living pay check to pay check. We are not sure what rights we have or what rights the lender has in Pennsylvania. Does anyone know what happens if I just stop paying the mortgage and let the foreclosure process begin? Can the lender garnish my wages or come after me for any kind of money?
I have never heard of any lender garnishing wages, but what I know is that you don't want a foreclosure on your credit. I would suggest you find an investor in your area and let them help you. my .02 cents
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The worst a lender could do is take away your house, but that is not the best solution to your problem. Foreclosure leaves you with bad credit for years to come.
Even if you think that the house is not worth much, someone, such as a real estate investor could find ways to make it work for you and for them. I would strongly suggest contacing someone in your area that might help.
In CA there are two processes for foreclosure. One is a non-judicial foreclosure which in CA is a Trustee' Sale. There are no deficiency judgements on a Trustee's Sale so the lender cannot come after other assets.
Far less common is a judicial foreclosure where there can be a deficiency judgement to come after other assets. The problem for a lender with judicial foreclosures is that they are more expensive and time consuming and there is a one year redemption period after the foreclosure. This discourages buyers and usually the successful bid will be less as a consequence.
Loans on property up to four units where one is used for personal residence are automatically non-recourse loans. This is true even if the property becomes a rental. You might want to check on state laws in PA to see if your laws are similar.
You should look to other solutions before letting your house go into foreclosure. One possibility is to sell to an investor. Another might be to give an option to buy in the future and collect option consideration each month to bring in additional money to help ease your financial position.