Do I Lose Personal Property If I Foreclose on My Home?

Homeowners usually worry if they will lose other properties aside from their home if it is foreclosed and the amount obtained from the auction is less than what is owed. In general, a personal property and others that have not been specifically stated in the agreement as collateral for the loan cannot be taken by the lender.

Thus, if the bank forecloses your house, your personal property is not included and the lender does not have a legal claim on any property that is not a part of the home.

Therefore, you can legally take with you your personal property when you leave the house. However, it is vital to know the distinction between a personal property and a fixture. Basically, if the item is attached to the house and removing it would cause damage, this is considered to be a part of the house and you have no right to bring it with you. 

It should be noted, however, that if the bank is unable to fully get back what is owed from the proceeds of the auction sale, it can sue you to force you to come up with the deficiency. In some states, there is an automatic deficiency judgment after a foreclosure sale that fails to completely pay for the loan balance, including the expenses incurred by the bank for the foreclosure.

In the states where there is no automatic deficiency judgment, the bank may file for a motion for a deficiency. And if the court grants the motion, your wages may be garnished, your bank account may be frozen, or liens may be attached against some of your properties.