From Les Christie at CNNMoney: You lost your house - but you still have to pay
As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?
Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction.
Vanessa Cory short sold her home. She negotiated the short sale and thought it was the end of it.
"My understanding was that the deficiency was negotiated away," she said. "Then, last November, I got a letter from a lawyer telling me I owed my lender $65,000. I had to declare bankruptcy. There was no way I could pay it."
"After the banks foreclose, it's very common now to have large deficiencies with houses not worth the balances owed," said Don Lampe, a North Carolina real estate attorney.
"Once they have a judgement, they can pursue you anywhere," said Richard Zaretsky, a board certified-real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished, and if you fail to respond, a judge can put you in jail."
It just doesn't look like there is any relief these days. Banks coming after you even after you foreclose is just putting the nail in the coffin. As if things weren't bad enough, forcing people to file bankruptcy after a foreclosure is just not going to get this economy going again.
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