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After Foreclosure how does the bank have to start collection on any deficiency?


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3 replies to this topic

#1 raining

raining
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Posted 26 April 2012 - 07:42 AM

My SOs XW was supposed to be paying the mortgage. She was supposed to refi back in 2009 and couldn't get approved. The house had a little equity at that point.

Long story short, she got mad after losing in court regarding the house and having to put it on the market. so she quit paying the mortgage in May 2011. She refused to vacate until Oct 2011 so SO couldn't get a modification or rent it out to cover the mortgage. The foreclosure proceeded and the house was sold in Feb 2012. There was a 60K deficiency.

His XW was not on the note so the bank won't pursue her for the deficiency. If they come after SO he needs to sue her for the money directly. He's very stressed about the possibility of being sued by the lender (Bank of America). How long do they have to start collection activities on the deficiency?



#2 tiggerlgh

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Posted 26 April 2012 - 08:22 AM

What State are you in? That will determine IF the bank can even come after your SO for the deficiet or not.

#3 raining

raining
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Posted 26 April 2012 - 02:36 PM

Idaho

#4 SportsNut

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Posted 26 April 2012 - 03:25 PM

Idaho


Looks like they have to bring the action within 90 days to establish the deficiency judgment. If not, he avoids the judgment.
The judgment, if sought, would be the difference between FMV and the amount owed on the debt, plus costs and fees.
Now lets say the bank is the only one that bids, doesn't mean that the bid amount and FMV are one in the same. They could easily be different and a defense to the judgment sought might well be an appraisal showing FMV, if their number happens to be too far in the lenders favor. Now could we ever imagine this happening, nah. Good luck on it.

45-1512. MONEY JUDGMENT -- ACTION SEEKING BALANCE DUE ON OBLIGATION. At
any time within 3 months after any sale under a deed of trust, as hereinbefore
provided, a money judgment may be sought for the balance due upon the
obligation for which such deed of trust was given as security, and in such
action the plaintiff shall set forth in his complaint the entire amount of
indebtedness which was secured by such deed of trust and the amount for which
the same was sold and the fair market value at the date of sale, together with
interest from such date of sale, costs of sale and attorney's fees. Before
rendering judgment the court shall find the fair market value of the real
property sold at the time of sale. The court may not render judgment for more
than the amount by which the entire amount of indebtedness due at the time of
sale exceeds the fair market value at that time, with interest from date of
sale, but in no event may the judgment exceed the difference between the
amount for which such property was sold and the entire amount of the
indebtedness secured by the deed of trust.




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