Residence Foreclosure
If my rental property goes into foreclosure do I risk losing my primary 1 family residence?
I purchased a 3 family home about 8 years ago. Since then I got married and started a family. About three years ago I purchased a single family home in a different state which I use as my primary residence. My original 3 family rental is in risk of going into foreclosure. Can I lose my 1 family primary residence if the 3 family rental does go into foreclosure?…Can the bank come after my primary residence or any other assests that I have?
they can certainly try, and will, if there is a big difference between your mortgage and the costs involved with the foreclosure. Example: you bought the three family home for $300,000 and have a $250,000 mortgage. If you get foreclosed upon and the lender takes $240,000 for the property (in a future sale) and has $10,000 in costs, they are “out” $20,000–they have a right to seek damages for this amount and will probably do so. However, if they sell the property for $250,000 plus costs, and are only out a few thousand, they may not deem it worth it to go after your new primary residence. However, it would be the lender’s decision.
A better approach may be to try to sell the property with a lease/option, which a GOOD realtor will explain to you (but beware, the realtor will have to wait for the sale to close maybe a year down the road and they won’t want to wait for their commission, so they will bad-mouth this action). But it’s a good way to sell in a down market. Real estate will make a comeback so if it at all possible, keep the property if you can. I understand this may not be possible, and good luck.
1613 Hillcrest Road, Hollister California – Foreclosure Home!
