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Foreclosure Risk: Will your lender sue you?

Do you have a huge amount of debt on your home? Does your mortgage balance exceed the equity in your home?

Even if you can sell your properties, you may not be done with your debt. According to the Sun Sentinel, lenders will file numerous lawsuits against homeowners in the next few years to pay off the remaining balance of their notes. Even with an agreement from the bank, It should remain the normal to not rely on verbal commitments: get everything in writing.

“In Florida, banks have five years from the date of the sale to file for so-called deficiency judgements and up to 20 years to collect” wrote Paul Owers of the Sun Sentinel. But each state’s law varies making it time to do some research.

As the new normal in real estate becomes foreclosures, foreclosures, and more foreclosures, agents and homeowners need to realize the risks. According to USA Today, 321,480 homes filed foreclosures during May. With one in every 398 homes receiving a foreclosure filing, do not ignore the threat of a foreclosure lawsuit.

Mark Zandi of Moody’s says, “I expect the high rate of foreclosures to continue through most of the year, given that unemployment will rise and the lean modification program seems to be less effective than expected.”

For more information, visit the Foreclosure Resource Center.

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