If I have a home and is currently under foreclosure would that effect my other home currently paying for?

2 comments

1. 

   Othniel on December 12, 2009 at 3:41 pm

   I don’t think your home will be in danger, but any kind of refinancing will most likely be affected.

2. 

   financing_loans on December 13, 2009 at 11:54 pm

   It depends on your state. Lets say you owe 200,000 on your home that is in foreclosure. Lets say they sell it for 150,000 at sell. You still owe them 50K in a deficiency. They can get a deficiency judgement. They now how a 50K judgement against you. This judgement can be attacked to real property.

   So they can put that judgement against your current home. They could forclose to get the judgement paid on your current home, but since they are the Jr. Lien holders it would be unlikely. But at the sell or refinace of the home you would have to pay them back.

   Some states are anti-deficiency. You need to check your state. Ones that are anti-deficiency will normally send you a 1099 at the end of the year. They write off the 50K they lost and you have to claim the 50K as income. You pay the taxes as if it were income.

   Now one thing to remember. If the bank sets the auction at 150K and somebody outbids the bank. You dont owe a damn thing. So if somebody comes to look at your house, show it to them, keep it clean. You want somebody to buy it besides the bank. The bank sets only one bid, 1 dollar over that you dont owe a damn dime.

   Good luck.