Can The Bank Take My Primary Home If My Second Home Is In Foreclosure?

Jan. 22, 2010 - PRLog -- Different laws have different states regarding this situation, but most allow for the lien holder to file a lawsuit against you in court because after the foreclosure sale the remaining balance becomes an unsecured debt.

Natalia Osorio Editor of the "Stop Foreclosure Loans" website -- http://www.StopForeclosureLoans.org  -- pointed out;

“…If the creditor wins in court, which is likely, they will be granted a judgment against you that enables them to collect through wage garnishment, levying bank accounts and placing liens on property. In some states, the creditor can even force the sale of your primary home. Again, this process depends on the state law…”

Often, in order for an unsecured creditor to force the sale of your home, it must first pay off the mortgage on that property and pay you an “exemption” amount. The more equity one has in their primary residence, the more likely it is that an unsecured creditor will force the sale of that property. This is because they are more likely to gain money from a home with little left on the mortgage as compared to one with significant debt attached.

Bankruptcy is not a viable option if you intend on keeping one of the properties. However, you can try to rid yourself of the secondary property by instigating a deed in lieu of foreclosure. This is not much better than foreclosure, but insures you against several possible repercussions a full foreclosure may have. However, it is advised that this method is not used except in extreme circumstances where you are already certain you are going to lose your home.

“…This will not be considered a full foreclosure, and the lien holder will not be able to pursue action against you for delinquency debt. If you are certain you are going to lose the home, this is the best option for keeping your other home. A deed in lieu is similar enough to foreclosure that it will stain your credit for several years, but it should spare you most of the damage of a foreclosure. It will also allow you to keep your other property…” N. Osorio added.

Further information about how to get professional assistance with a mortgage loan modification by http://www.StopForeclosureLoans.org