Do lenders come after refinance loans if not paid for?

Guest 0.10 Dollars($)

we refinanced a few years ago. Current ly we're having 80/20 loans and have 2 medical bills unpaid, we don't know what to do now that we can't pay our mortgage. I've heard that in our state, if you foreclose on your original mortagage, then lenders won't come after you for money. should we talk to an attorney the? And options do we have? Our credit is already smashed due to the medical disasters

larry · Joined: 27 Jun 2007 Posts: 3051 428.03 Dollars($)

Hi Simon,

Welcome to the forum.

I think you should talk with the lender ASAP and try to avoid foreclosure. If you go for foreclosure then not only that will affect you credit but you will have to pay the deficient amount.

I think if you cannot pay the deficient amount then request the lender for deed in lieu of foreclosure. That may have the same credit effect but the lender will not come after you for the deficient amount.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Niicss · Joined: 03 Oct 2005 Posts: 885 130.68 Dollars($)

Welcome Simon.

Where do you stay Simon? As far as I know you need to pay the due amount after the foreclosure sale. So as Larry suggested talk to the mortgage company and request for deed in lieu. If the Mortgage Company accepts the deed in lieu, he will not file deficiency judgment against you.

You need not to pay the tax on the forgiven debt because of the Mortgage Debt Forgiveness Act

Let me know if you have any further quarries.

brian1 · Posted: Fri Jun 20, 2008 8:59 pm Post subject:

It is true that there is less protection on a home that has been refinanced than on a purchase loan. Seek out a RE attorney and find out what your options are. The laws are different in just about every state.

Good Luck
Brian

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