We are about to be foreclosed and my husband's parents passed away and we are getting their house from the estate. My husband also received some cash. The house we are about to be foreclosed on is worth a lot less than what we owe on it. We don't want to lose both houses and all the money in the foreclosure. What's the best thing to do?
Real Estate Attorney
After the foreclosure, if there is a deficiency . . . in other words if the house sells at the sheriff's sale for less than the loan amount, the bank can sue you for the difference. If they win this lawsuit they can try and collect it by getting a lien on your assets, including your cash in the bank or any other real estate you own. This suit would be based upon the promissory note, not the mortgage. In the past, the banks have not been suing for this but they are starting to do so. You should contact a qualified attorney to determine whether there is any defense to the foreclosure or to any potential deficiency lawsuit. There may be. Don't wait, however . . . time is your enemy, not your friend.
Very accurate and thorough answer by my colleague. Hire an attorney.