After foreclosure, can the bank come after my primary residence and my bank account, saving and 401K and IRA?

Asked almost 6 years ago - Orlando, FL

Hi,

I own a investment short term rental property in Orlando, FL. I am not late on any payment but because of the recent economy, rental has been going down and I just got layoff from my job. Unfortunately, I can't keep paying for this property. If I default on the investment property, can they come after my primary residence in IL. I live in Hoffman Estates in IL. or my bank account, 401K or any other accounts. Most likely, I will be forecloseure in the coming year.

Peter

Attorney answers (2)

  1. Margery Ellen Golant

    Pro

    Contributor Level 20

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    Answered . Depending on what happens to the Florida property, if the bank does foreclose and realizes less than is owed to it, it is possible that it will pursue a deficiency judgment against you. If it does, this may result in a judgment in Florida, which could probably be transferred to IL. State law would control which of your assets would be subject to levy by the bank. In many states, retirement accounts are exempt. Normally, bank accounts are not exempt.

    Your best best is to speak to an attorney in Illinois so see which of the assets there could be susceptible to a deficiency judgment levy.

  2. Marci A. Rubin

    Contributor Level 7

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    Lawyer agrees

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    Answered . Just to add another point to the previous answer, you should have someone review the mortgage on the investment home. It is often the case that prople who purchase investment property utilize the same lender as they have for their primary residence. It is not uncommon for such a lender to add a cross default provision in the mortgage that essentially says that if you default on the mortgage for the investment property, it is considered a default on all other loans you have with that bank.

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