MI-Insurance Company Deficiency Judgment after Foreclosure

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I foreclosed on my house in MI back in 2006, and just the other day I get a letter from some attorney in CO who says he is representing some Insurance Company I've never heard of wants over 50k from me to settle, or they will persue a deficiency judgment against me.

I told the lawyer to send me the documents he has so I can see them, and all he sent me was a document from the sheriff sale (which shows the house sold at the sale, which it didn't), and some page with the insurance company's name, and lender's name, but no details on the insurance or anything about the policy. He says the Insurance Company paid out over 102k to the lender, but his itemized break down of the costs came up to like 14k.

Can an Insurance Company (I'm assuming PMI) come after me after a foreclosure? What are my options if this is legit? The documents the lawyer sent me don't match what really happend...the house was on the market after the redemption period expired for over a month, and Trott and Trott (lawyer who handled foreclosure) told me the house didn't sell at the sheriff's sale.

I'm thinking if this is legit, they would have to send it to a lawyer in Michigan, then I could just file Chap 7 (I have no other assets to my name) if they win a judgment against me.

This whole situation with them feels fishy.

larry · Joined: 27 Jun 2007 Posts: 3069 431.09 Dollars($)

Hi usedtobe,

Welcome to the forum.

The PMI Company comes after you for the deficiency judgment? I have never heard the PMI Company come after any seller. As far as I know the lender can come after the borrowers if he cannot pay off the mortgage.

I think you should contact an attorney ASAP.

Best of luck,
Larry

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Hi usedtobe,

I don't understand why an insurance company would ask for a deficiency judgment. Moreover, you're saying you haven't applied for such a policy with the company who has asked you to settle the debt. And why would an attorney representing the insurance company send you the Sheriff Sale's letter. It should be sent by the mortgage company.

I think you need to have a straight talk with the lender and show him the relevant documents if required. Also request him to help you out in order to convince the insurance company that you haven't applied for such a policy. Though you have the papers, but the lender should be the other person to know with whom you've dealt with had there been any insurance policy.

Hope this helps...if you have further queries, please feel free to discuss.

God bless you.

Samantha

Samantha · Posted: Mon May 05, 2008 5:24 am Post subject:

Oh! i got logged out somehow. That was me above.

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Here is an update.

The CO lawyer has forwarded the case to a MI lawyer, and he has already contacted me with the same request. I'm not sure if he will even talk to me, he is just going to file for a judgment against me. The insurance company is United Guaranty Mortgage Insurance if that means anything.

Should I start moving forward with Bankruptcy? Do I have a leg to stand on at all in this situation?

Thanks for your input, this is really turning into a very stressful situation.

Jessica

Hi usedtobe,

I don't think it will be helpful if you file bankruptcy now? are you doing it just to avoid paying the deficiency? then it's a different issue. But if you had filed bankruptcy prior to the foreclosure, that would have been much better. By the way, what type of bankruptcy do you wish to file? I think it will be better if you can file chapter 13 and pay at least some part of the deficiency using the repayment plan.

Have a talk with a bankruptcy attorney in this regard and let us know what he said.

Regards,

Jessica.

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