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Attachable Assets In Case Of Foreclosure Deficiency

Discuss the legalities of Bankruptcy Law

Attachable Assets In Case Of Foreclosure Deficiency

Postby curtiss62 » Mon Nov 21, 2016 4:33 pm

Am considering letting a lot bought in a SC beach resort go into foreclosure because the payments are crushing me, and the value is WAY below what I paid for it 2 yrs ago.  I have assets that are a couple of times what the lot is worth, but they are almost all in 401k, IRA's or my personal home. I live in NC.  If the lot were to sell at foreclosure for say $250,000 less than I owe, could the bank attach my home, 401k &/or IRA's?  I'm 52, so I can't even get the money out of the retirement vehicles without sever tax and penalties.

ANSWER: Lenders don't normally go after a deficiency balance in the event of foreclosure. In some states they are prohibited from doing so and in others they must file within a certain time period such as maybe 90 days or they are barred from doing so. You need to check your own state laws to see about that.

---------- FOLLOW-UP ----------

Thank you.  Is it the state laws of where the foreclosed property is rule, or the state that the borrower live in rule?

ANSWER: While I believe the state where the property is located would be the ruling state because that is where the foreclosure would take place I would strongly suggest that you contact competent legal counsel to see if that answer is correct or not. If we were to totally rely on FDCPA then the action to reclaim any deficiency judgment would have to be brought in your home state but state foreclosure laws might have a bearing on that too. You need the advice of legal counsel on that one.

---------- FOLLOW-UP ----------

Wow! thanks for the speedy reply.  One last clarification... generally speaking, are IRA, 401(k) and personal home equity all equally exposed if the lender has the right, and decides to seek a deficiency judgment from the foreclosure?  I was thinking that some, or all of those asset classes might be protected.
curtiss62
 
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Attachable Assets In Case Of Foreclosure Deficiency

Postby Huntley » Wed Nov 23, 2016 5:16 pm

I really don't know a thing about that so can't answer your question this time. Like you, I have heard that such plans are also exempt from garnishment but I don't have the foggiest idea whether that is true or not. I would ask another expert that question or better yet seek the advice of an attorney in your local area or an investment advisor. Sorry I can't help you on that one.
Huntley
 
Posts: 45
Joined: Tue Jan 07, 2014 6:06 am

Attachable Assets In Case Of Foreclosure Deficiency

Postby Hadyn » Wed Dec 07, 2016 2:25 pm

Am considering letting a lot bought in a SC beach resort go into foreclosure because the payments are crushing me, and the value is WAY below what I paid for it 2 yrs ago.  I have assets that are a couple of times what the lot is worth, but they are almost all in 401k, IRA's or my personal home. I live in NC.  If the lot were to sell at foreclosure for say $250,000 less than I owe, could the bank attach my home, 401k &/or IRA's?  I'm 52, so I can't even get the money out of the retirement vehicles without sever tax and penalties.

ANSWER: Lenders don't normally go after a deficiency balance in the event of foreclosure. In some states they are prohibited from doing so and in others they must file within a certain time period such as maybe 90 days or they are barred from doing so. You need to check your own state laws to see about that.

---------- FOLLOW-UP ----------

Thank you.  Is it the state laws of where the foreclosed property is rule, or the state that the borrower live in rule?

ANSWER: While I believe the state where the property is located would be the ruling state because that is where the foreclosure would take place I would strongly suggest that you contact competent legal counsel to see if that answer is correct or not. If we were to totally rely on FDCPA then the action to reclaim any deficiency judgment would have to be brought in your home state but state foreclosure laws might have a bearing on that too. You need the advice of legal counsel on that one.

---------- FOLLOW-UP ----------

Wow! thanks for the speedy reply.  One last clarification... generally speaking, are IRA, 401(k) and personal home equity all equally exposed if the lender has the right, and decides to seek a deficiency judgment from the foreclosure?  I was thinking that some, or all of those asset classes might be protected.
Hadyn
 
Posts: 50
Joined: Wed Jan 08, 2014 10:09 am


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