Can a mortgage lender pursue an owner that is not on mortgage for a deficiency balance?
Written By: admin on January 20, 2010
One Comment
I bought a residential investment property in Florida with my former boss. The mortgage is in his name only but I am also on the deed. He wants to let it go to foreclosure. Can the lender come after me for the deficiency balance. Will the foreclosure show on my credit?
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Tags: boss, foreclosure, mortgage, Mortgage or Home Loans, residential investment propertyTags: boss, foreclosure, mortgage, residential investment property
The answer is NO. A mortgage is a "contract" stating that in the event you do not pay the debt, the collateral (the real estate) will be seized by the lender. You were not a party to this contract.
A Deed (normally a Warranty Deed) is a legal document showing ownership. It does not obligate you to any debt.
You were most likely place on Title after the mortgage was already placed on the property. By not signing the mortgage "contract" you did not obligate yourself financially for the debt.
Therefore you will not receive a foreclosure on your credit report, nor will you be liable for a deficiency judgment or 1099-C Cancellation of Debt Income.
Mr. Financial Freedom
http://www.5StepsToFinancialFreedom.com