The bank forecloses on your home and then files a lawsuit against you, how is this possible?
The bank forecloses on your home and then files a lawsuit against you. How is this possible? I was reading in RISMEDIA on June 8, 2010, about a home seller who has sold his home in a short sale. He sold it for approximately $200,000.00 less than the first and second mortgage he owed on the property. The Mortgage lender has agreed not to pursue further action to recoup their losses.
Evidently there are many home sellers who did not negotiate this clause into the transaction. Hence there are many lenders who file lawsuits and are going after foreclosures and short sales owners. Why you might say? The answer is, that lenders are trying to discourage bad behavior, such as angry homeowners who destroy kitchens, bathrooms and sell fixtures such as granite counter tops on e-bay to name a few.
Customarily mortgage companies will not sue homeowners who negotiate in good faith or those who default due to job loss or other catastrophic circumstances. Nevertheless I strongly encourage potential sellers who are underwater to get it in writing from the Mortgage Lender that they will not pursue further legal action once the transaction closes.
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