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after foreclosure, who is responsible for difference in price?

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August 29 2013 - Mount Joy
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If the property was here in California, for example, there would not be any further action taken against the former home owner,they would walk away from the property, without fear of having the lender come after them for any outstanding balances. However, there could be some 1099c consequences, as the remainder of the unpaid balance would be reported as untaxed income to the I.R.S. it is recommended that the homeowner get qualified tax advice in any circumstance to determine what, if any, liability, may exist as a result of the 1099c.
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August 30 2013
A foreclosure allows a deficiency judgement against you. Like a car repossession. You owe the difference.

Basically, you promised to pay a certain amount on a loan and you defaulted on the loan, just because you lost the collateral (the home) doesn't mean you no longer owe anything on it. Lenders are in the "lending" business. If a friend borrowed $100k from you, wouldn't you expect every penny back regardless what they did with the money or if they lost it in some bad deal? Of course, you would. 

You plain and simple.. you owe it, you owe it, you owe it.  So, as many others have suggested, try to SHORT SALE the property. It will be kinder on your credit and your wallet.  For a Short Sale, you will have to contact a Realtor since it has to go through one in order to be accepted by the lender. 
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August 30 2013
That's why if you can, always short sale your property before allowing it to go to foreclosure.  Not only save the tax deficiency the IRS could stick you with on foreclosure(depending which state your in) but the ding on your credit is half that with a short sale vs foreclosure. Plus buying big ticket items will be impacted for several years with a foreclosure.
Speak to your tax man on the specifics but short sales are the way to go if your in dire straits housing wise.
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August 29 2013
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If you foreclose on your home, if you are in a state that allows deficiency judgements then the lender can  come after you for the difference.   Some states do not allow deficiency judgements.

If you are a buyer, you are not responsible for the difference between what is owed and the sales price.
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August 29 2013
 
Related Questions
after foreclosure, who is responsible for difference in price?
Profile picture for Reuben Dunn
Latest answer by Reuben Dunn
August 30 2013 | 4 answers
  • Asked by user5942626
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  • August 29 2013
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