Foreclosed Homeowners Face Second Round of Harassment

April 1, 2011

If you’ve lost your home to foreclosure, brace yourself.  You could be socked with a double whammy.  If you thought your debt was forgiven when you gave up your home.  Think again.  In many cases, lenders received deficiency judgements and are now going after homeowners for the remaining debt, even though they got your home.  The second wave of harassment will soon be coming to haunt foreclosure victims. 

CWN’s John Newcomer first alerted consumers to  this looming issue two years ago, explaining that in a short sale, most mortgage companies only release the property from the mortgage lien, not the remaining debt.

Just because the mortgage company has consented to the sale and released the lien on the property, it does not mean the borrower has been released from the debt.  In fact, the release agreement often spells it out, but unfortunately it’s spelled out in “lawyer language.”

Click here to read this sobering report on definciency judgements from reporter Kris Hundley with the St. Petersburg Times.