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Roger, Lawyer
Category: Real Estate Law
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I secured a new home mortgage for a second home and followed

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I secured a new home mortgage for a second home and followed the banks requirements honestly. I am building a new home and put my old home on the market but I don't think it will sell with todays market and the amount I owe on my first mortgage. I will also try to rent if possible. I was wondering what the bank for the first mortgage could do legally if I end up not being able to pay and ends up in forclousure?
Submitted: 5 years ago.
Category: Real Estate Law
Expert:  Roger replied 5 years ago.

Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney here to assist you.


In Minnesota, a deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. Thus, if you stop paying on your property and it forecloses, you are responsible for the balance.


If a judgment is rendered against you, it will serve as a lien against all of your property - real and personal. The lien would extend to your new home as well.


However, Minnesota has a $300,000 homestead exemption ( This means that in order for a judgment creditor to recover, the property would have to be sold and the mortgage would have to be paid in full, then you'd get the next $300,000, and then whatever is left over would be available to the judgment creditor.


Because there's probably no money left after paying the mortgage company and giving you your equity, the creditor isn't likely to come after your property.

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