Lenders Chase Borrowers for Money Lost in Foreclosures
For Americans who lost their home to foreclosure, the real estate nightmare may not be over.
In many states -- such as Florida, Illinois, New York, Texas, and Virginia, to name a few -- lenders have the legal right, known as a deficiency judgment, to go after borrowers who owe money on their foreclosed home. The lender can reclaim the losses on the difference between the selling price of the distressed home and the amount owed on the home, also known as a deficiency.
In Virginia, Maryland and Washington D.C., where deficiency judgments are permitted by law, lenders are aggressively seeking to recover monetary losses from foreclosures and short sales, reports The Washington Post.
But what will this mean for foreclosure victims who still don't have the cash to repay their debt?