Monday Market Myth: Foreclosure

Myth: Homeowners who went through foreclosure do not have to worry about a first or second lien holder to sue for the difference in the loan amount to the current market value.

False: If the borrower foreclosed with non-purchase money, the first and second lien holder can come after the burrower for the difference.   A new law this year states that a lender cannot come after a borrower if they do a short sale of an owner occupied or non owner occupied for single family residential with purchase or refinance money.  It is best to talk to a real estate attorney and CPA before you consider not making a payment.


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