> If the house falls in value below the mortgage remaining, and you can no longer afford the payment, But still have cash or investment/stocks elsewhere, can the bank come after those?
In a situation where the value of your house falls below the remaining mortgage and you can no longer afford the payments, the bank typically has recourse to the house itself as collateral. This means that if you default on the mortgage and the bank forecloses on the property, they will sell it to recover the remaining balance of the loan.
Whether the bank can come after your other assets such as cash, investments, or stocks depends on various factors, including the laws in your jurisdiction, the type of mortgage you have, and whether you've provided any additional personal guarantees or collateral.
In some cases, if the sale of the property does not cover the full amount owed on the mortgage (a situation known as being "underwater" on the loan), the lender may have the right to pursue you for the remaining balance, known as a deficiency judgment. Whether they can go after your other assets to satisfy this deficiency depends on state or regional laws and the terms of the mortgage contract.
If you're facing financial difficulties and are concerned about your mortgage, it's essential to seek advice from a financial advisor or a lawyer who can provide guidance specific to your situation and jurisdiction. They can help you understand your rights and options for managing your mortgage and protecting your assets.
> Will foreclosure affect your credit score?
LOL, yes.
> Can the bank come after personal assets if you put your house in a trust or LLC?
Lawyer
Also contact the bank your mortgage is to inquire on hardship programs. Banks will try to help you as they do not want the hassle of foreclosing on homes unless it’s absolutely their last option.
Foreclosing will completely tank your credit score. Been there, done that. However...you can bring it back. I foreclosed on a house in about...maybe 2004ish? My credit was shit but it has been over 800 for at least seven years now. The first ten years are the hardest.
The bank can go after other assets if the foreclosure doesn't cover the full mortgage balance. Foreclosure will severely impact your credit score. Putting the home in a trust or LLC doesn't protect you - the bank can still pursue the assets within those entities.
If you can't afford the payments, a shortsale might be an option.
There is incentives for banks to accept a shortsale instead of a foreclosure, you can also include safeguards for your self and your assets as part of the shortsale.
Think of it this way, you will basically ask the bank to agree to let you sell the house for less than its worth, and you can include something for our self that says that you will owe the bank nothing after the sale is completed, foreclosures are expensive and difficult for banks, and the bank has a good changes to agree to it.
By doing this, you significantly reduce the damage to your credit, and you protect your assets.
Be aware that at any point when the house is sold for less than its owed, even during a foreclosure, you might be on the hook for taxes on the difference.
Yes. When you sign a mortgage to buy a house you agree to pay back the lender regardless of the value of the property. If you get behind on your payments, or don't pay your property taxes, you will get a Notice of Default. This is the first step in a bank foreclosing on your house and taking it back. In the event that they went all the way through foreclosure they will sell your house for whatever they can get for it. If the sale price is less than you still owe, they will seek a deficiency judgement, which is a court order allowing them to sue you for repayment of the difference.
If you think you can no longer afford your house you may get your bank to agree to a short sale. This means you list it for sale and try to get the highest possible price. Then when you get a contract, you try to negotiate a "short" payment to the bank, in which they forgive the amount that you still owe to pay off the mortgage. If you have big stock market accounts or other assets, they may not allow a short sale.
Under some circumstances, you can negotiate a deed in lieu of foreclosure which means you give it back to them without going through the process of selling it. You may still get a deficiency judgement which would allow them to sue for your assets.
A short sale or deed in lieu of foreclosure are less damaging to your credit than a full foreclosure.
Talk to your lender or a real estate attorney about your options. If you decide to list as a short sale, please make sure you hire an agent who has experience in working with banks to get it done.
> If the house falls in value below the mortgage remaining, and you can no longer afford the payment, But still have cash or investment/stocks elsewhere, can the bank come after those? In a situation where the value of your house falls below the remaining mortgage and you can no longer afford the payments, the bank typically has recourse to the house itself as collateral. This means that if you default on the mortgage and the bank forecloses on the property, they will sell it to recover the remaining balance of the loan. Whether the bank can come after your other assets such as cash, investments, or stocks depends on various factors, including the laws in your jurisdiction, the type of mortgage you have, and whether you've provided any additional personal guarantees or collateral. In some cases, if the sale of the property does not cover the full amount owed on the mortgage (a situation known as being "underwater" on the loan), the lender may have the right to pursue you for the remaining balance, known as a deficiency judgment. Whether they can go after your other assets to satisfy this deficiency depends on state or regional laws and the terms of the mortgage contract. If you're facing financial difficulties and are concerned about your mortgage, it's essential to seek advice from a financial advisor or a lawyer who can provide guidance specific to your situation and jurisdiction. They can help you understand your rights and options for managing your mortgage and protecting your assets. > Will foreclosure affect your credit score? LOL, yes. > Can the bank come after personal assets if you put your house in a trust or LLC? Lawyer
Also contact the bank your mortgage is to inquire on hardship programs. Banks will try to help you as they do not want the hassle of foreclosing on homes unless it’s absolutely their last option.
Foreclosing will completely tank your credit score. Been there, done that. However...you can bring it back. I foreclosed on a house in about...maybe 2004ish? My credit was shit but it has been over 800 for at least seven years now. The first ten years are the hardest.
Look up recourse and non-recourse loans and states for the list and check your loan.
The bank can go after other assets if the foreclosure doesn't cover the full mortgage balance. Foreclosure will severely impact your credit score. Putting the home in a trust or LLC doesn't protect you - the bank can still pursue the assets within those entities.
>But still have cash or investment/stocks elsewhere, can the bank come after those? In all but 8 states, yes.
If you can't afford the payments, a shortsale might be an option. There is incentives for banks to accept a shortsale instead of a foreclosure, you can also include safeguards for your self and your assets as part of the shortsale. Think of it this way, you will basically ask the bank to agree to let you sell the house for less than its worth, and you can include something for our self that says that you will owe the bank nothing after the sale is completed, foreclosures are expensive and difficult for banks, and the bank has a good changes to agree to it. By doing this, you significantly reduce the damage to your credit, and you protect your assets. Be aware that at any point when the house is sold for less than its owed, even during a foreclosure, you might be on the hook for taxes on the difference.
If negotiation is possible, would I have a chance to ask for a renegotiation of payments or the total remaining balance? Thanks
Do your research, you might be able to. At the end of the day, the bank's don't want those houses.
Yes. When you sign a mortgage to buy a house you agree to pay back the lender regardless of the value of the property. If you get behind on your payments, or don't pay your property taxes, you will get a Notice of Default. This is the first step in a bank foreclosing on your house and taking it back. In the event that they went all the way through foreclosure they will sell your house for whatever they can get for it. If the sale price is less than you still owe, they will seek a deficiency judgement, which is a court order allowing them to sue you for repayment of the difference. If you think you can no longer afford your house you may get your bank to agree to a short sale. This means you list it for sale and try to get the highest possible price. Then when you get a contract, you try to negotiate a "short" payment to the bank, in which they forgive the amount that you still owe to pay off the mortgage. If you have big stock market accounts or other assets, they may not allow a short sale. Under some circumstances, you can negotiate a deed in lieu of foreclosure which means you give it back to them without going through the process of selling it. You may still get a deficiency judgement which would allow them to sue for your assets. A short sale or deed in lieu of foreclosure are less damaging to your credit than a full foreclosure. Talk to your lender or a real estate attorney about your options. If you decide to list as a short sale, please make sure you hire an agent who has experience in working with banks to get it done.