I bought a second home cash in Indiana recently. My first home will start the short sale process and may go into forclosure. Can the bank take away my newly purchase property?
Divorce / Separation Lawyer
I see you are located in Gaithersburg, MD, so if your first home is located in Maryland where I am licensed as an attorney, then I would respond that it depends on how the lender handles the foreclosure process. If the lender for your house in Maryland obtains a judgment against you for money (a deficiency judgment), then that lender can go after your assets where ever they may be located, even if they are located in another state such as Indiana. However, if the lender of your short sale house in MD only forecloses on your house, and takes only the house, but does not also obtain a judgment for money against you, then that lender will have no right pursuing your assets anywhere, including your house in Indiana. So the answer really depends on how the lender forecloses on your MD house. If your short sale house is not located in Maryland then you should consult an attorney licensed in the state where your short sale home is located.
This answer is GENERAL INFORMATION ONLY and does NOT constitute Legal Advice and does NOT establish an Attorney/Client Relationship because you have not provided me with a COMPLETE set of the FACTS, and therefore my answer cannot address your specific situation. I am an attorney licensed in Maryland and California. A Consultation, Retainer and a fully signed and dated Legal Services Agreement (a contract) will be required if you would like to obtain my representation. Office: (410) 381-1656. David Mahood, Esq.
Family Law Attorney
I would add that you can try and negotiate with the lender to forgive any deficiency before the short sale and obtain that in writing.
Legal disclaimer: Mr. Tabaku may be reached at (240) 750-4663 or firstname.lastname@example.org. Mr. Tabaku is an attorney licensed in the state of Maryland. This answer is for general information only based upon the facts stated in the question and does not create an attorney client relationship between Mr. Tabaku or Tabaku Law Firm, LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.
Going through a short sale on the first may allow you to keep the second home - because you may be able to negotiate forgiveness of the remaining debt on the first house, or something else that will avoid the lender obtaining a judgment against you. If they pursue a judgment, they can attache it to your second.