Skip to main content

Can a bank file a personal judgment before finishing foreclosure process ?

Brooklyn, NY |

I'm in middle the process of doing a Short Sale but meanwhile my second mortgage banker filed a judgment against me, So my question is, are they allowed to do that?

Attorney Answers 2


Yes, unless there is some kind of court order than doesn't permit them to.

Mark as helpful

1 lawyer agrees


A mortgage loan has two parts: the Note and the Mortgage. The Note represents the borrower's promise to repay the loan, and the Mortgage creates a lien against the borrower's home to secure the performance of the borrower's repayment obligation.
When a mortgage loan borrower defaults in repaying the loan, New York law gives the holder of the mortgage the right, at its option, to: (a) foreclose the lien of the mortgage; or (b) sue on the Note to obtain a money judgment. This right exists regardless of whether the mortgage is a "first mortgage" or a "second mortgage."
It soumds like the holder of your second mortgage has chosen to sue on its Note to obtain a money judgment. This is legally permissible, provided that: (a) you are in default in the payment of the second mortgage Note; and (b) the lawsuit is commenced and prosecuted in accordance with the rules of procedure which are applicable to it. As a practical matter, you would not be able to successfully complete a short sale of your property without securing the consent of ALL lien holders--including the holder of your second mortgage. If you can negotiate an agreeable payment to each of your lenders, the pendency of a suit for a judgment on your second mortgage Note would not be a big problem: the plaintiff in that lawsuit would simply discontinue the action--or, if a judgment has been obtained, provide a satisfaction of judgment--at the time of the closing of the short sale.
DISCLAIMER: The foregoing is not intended to constitute legal advice, or to create an attorney-client relationship between us (See paragraph 8 of Avvo Terms and Conditions of Use). It is offered, instead, as general legal information relevant to the issue(s) raised in your question. Legal information is not the same as legal advice (i.e., the application of law to an individual's specific circumstances). If you desire to obtain legal advice, you should retain the services of an attorney to represent you. If you choose to act upon the information provided above without first retaining an attorney, you do so at your own risk.

Mark as helpful

1 lawyer agrees

Real estate topics

Recommended articles about Real estate

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics