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What Can Happen To A Person Who's Home Is FC?

rhondakl profile photo
  • Wednesday, November 24, 2004 @ 07:36 AM EST
  • 2 Comments

If your property is foreclosed upon and you have other property that is lien free, can the lender sue you if they sell the property at a loss???

Comments(2)

  • no photo
    Apprentice2Him23rd November, 2004

    I think so.

    Most residential loans are "full recourse loans" which means that in case of foreclosure, the bank can hve access to all the borrowers present and furture assets to cover their losses.

    Usually, though, the home will sell in a manner to satisfy the bank. However, if some investors had their way, they would get acquire the house at a rediculous price, forcing the bank to take recourse action against the troubled homeowner.

    If you hold houses as investment properties, and one of your properties forecloses, all are at risk, if they are held jointly in your name.

    To protect yourself you should hold investments in a corporation, such as an LLC or land trust. This putss them out of reach from the banks and other creditors.

    hope this helps
    dan

  • no photo
    rhondakl24th November, 2004

    Thank you for your reply.

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