My home in Idaho is going through a foreclosure. I have been trying for almost a year to do a deed in lieu on the home, but due to both lenders being greedy and incompetent, it's still not done. The foreclosure sale has now been scheduled for October. I am trying to determine what is the best way for me to proceed. Since I was unable to sell the home for what was owed, if I allow it to go through foreclosure, will they be able to come after me for any shortages when or if they sell the home? Also, does this affect my credit even worse than doing a deed in lieu? I'm in my late 50s and have lost all my equity in this home and now live across the country paying more in rent than I ever did in mortgage payments. I really would like to be able to have a home again soon.
State/Country relating to question: Idaho
I have tried to sell my home without success; I have tried to do a deed in lieu, but the second lender wants money I don't have to approve the deed; and I have finally taken out another loan to pay them off, but the first lender has been sitting on the process for months and finally sent the check back to me because of another screw up.
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Good afternoon. Idaho, unfortunately, is a deficiencystate...which means the lender can pursue the borrower for the deficiency...theamount owed over the amount of the foreclosure sale. Whether or not they willdepends upon their assessment of the collectibility of a deficiency judgment.So, if the borrower can convince them there is nothing for them to get, andthat if they were to pursue a judgment, the borrower would simply file forbankruptcy protection and get the judgment discharged-and even if the borrowerhas no intention of doing so, it is still good leverage with the bank becausethey do not know whether the borrower will not do so--- then it is unlikely thelender will spend the time and money necessary to get a judgment they believeis uncollectible in the end.
Either a deed in lieu, short sale or a foreclosure is pretty much going to have the same impact on your credit score...80-160 points depending on where it is now. And, in any of these cases, you will be able to obtain a loan, presuming no further negative incidences, after 2 years.
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To clarify your response, I was wondering about a judicial vs a non-judicial foreclosure. According to the Idaho statutes, it seems like if the lender does a non-judicial foreclosure, they are unable to request payment of shortages. The letter I received from the lender was not a court ordered foreclosure. Am I correct in my interpretation of the statute? Also, I am worried that the foreclosure may take even longer than the October date since there is a second lienholder involved. Don't they have to approve the sale and the terms of the payoff before the property can be sold? And is that second lienholder obligated to the same laws as the priXXXXX XXXXXenholder, or can they pursue me for separate payment?
That is correct....it depends upon what type of foreclosure the lender pursues. Most banks don't pursue the deficiency so they do the non-judicial; if the bank is going to pursue it, then they do the judicial foreclosure. The foreclosure by the first lienholder automatically extinguishes the second lien and the second lienholder only gets any money left over after the first lienholder gets paid in full. If the second lienholder doesn't get paid in full, they can pursue the deficiency no matter what type of foreclosure the first conducts.
Texas lawyer for 32 years; Also RE developer
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