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I have a home, then bought a 2nd home as investerment- now losing due to foreclosure. Can the bank reposses other of my property besides just the 2nd investment home?

4 Thoughts on Bought a 2nd home as investment-now losing to forclsre. can the bank reposses other property besides 2nd home?
  1. Reply
    January 5, 2013 at 12:44 am

    They would only go after what the loan covers. If you got a blanket mortgage for both properties they could. Depends on your mortgage & bank’s policy.

  2. Reply
    Alex Myers
    January 5, 2013 at 12:57 am

    No, they can only go after the loan attached to the property that is being foreclosed. A lot of investors in this market are walking away from investment properties. Its not good but it’s happening all too often.

  3. Reply
    January 5, 2013 at 1:03 am

    The lender can’t repossess your current home but could put a lien on it.

    If the amount of the loan and fees associated with the foreclosure are not recovered when the house is sold at auction and by the private mortgage insurance that you may or may not have had on the property, then the lender can, and often will, seek the remainder owed such that your present house and other assets could be at risk.

  4. Reply
    January 5, 2013 at 1:22 am

    This depends on state law. Look up your state’s foreclosure laws and find out if they are allowed to sue you for a deficiency judgment after the foreclosure. It’s not allowed in all states under all circumstances, so until you’ve researched the issue, you won’t know for sure if it’s even a possibility.

    But if it is possible, banks rarely pursue it anyway. They know that it will cost more time and money on their part after the foreclosure to sue you again. Even if they get the judgment and try to put a lien on your other home, there’s little expectation they’ll ever be able to collect on it, since it would be a second lien, which usually gets nothing in a foreclosure sale.

    It’s just not worth their time to go after your car or price race horse, either, as banks aren’t in the business of appraising those and attempting to sell them. They’d rather just move on and try to sell the property on the open market to make up their losses. Going after your other assets won’t help them with this.

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