Deficiency Time Bombs

This was a great article from CNN Money that talks about deficiency judgments as ticking time bombs that can explode years after borrowers lose their homes. Honestly it is a frightening proposition that banks can come after borrowers when the bank receives less than what is owed, even people who got their bank to approve them selling their home for less than it is worth.

Before you panic let me start by saying that California is a non-recourse state (thankfully) and don't allow deficiency judgments. "Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them."

So if you are considering a short sale or a foreclosure on a property outside of California, please, please check to see if that state is one of 30 that supports these deficiency judgments!

For the full article from CNN Money click here.