Even though losing your home can be one of the most terrible events one can face, many people just feel the need to get away from all the financial stress and want to pursue a new life somewhere else. Short sales or walk aways seem to be the only real choices an individual has if they need to move away from a home that is not worth what they currently owe on the mortgage.

For those you of that have gone this route there may still be a chance that you are still liable for the deficiency balance after the foreclosure auction or short sale has been completed. Unless of course you, your realtor, or attorney has negotiated with the bank to waive all rights to collect the deficiency balance after the sale has taken place.

This is the all too common reality for thousands of Americans around the nation. With economy the worst it’s been in decades people are not making the kind of money they used to and many are being forced to move elsewhere.

It is unexpected circumstances such as a job transfer and/or unemployment that is causing a a surge of foreclosures and short sales to sweep across the US. And if the home was not sold or auctioned off for the amount that the borrower owes on the mortgage, they must be aware that the lender can still pursue the deficiency balance of the loan. Depending on the state you are located and the size of the loan, the deficiency balance can be much more than the borrower can handle.

How do you know if the bank can still pursue your deficiency balance?

Well it will depend on many factors whether or not the bank can still come after you for the deficiency balance after a short sale or foreclosure auction has taken place, such as the state in which the property is located and whether or not there is an additional mortgage or other liens on the home. Make sure you do not ignore the fact that they may still come after you, study your states foreclosure laws and get free legal consultation as well, if possible.

According to the US Foreclosure Network, there are more than 30 states that are allowed to pursue the deficiency balance in the event of a foreclosure, including major states such as New York, Texas, and Florida. But for states that are non-recourse, like California (one of the hardest hit states by the foreclosure crisis), lenders are not allowed to pursue the deficiency balance. Unless the original mortgage loan was refinanced into a recourse loan making it subject to any judgments.

So if you are one of millions of Americans that are feeling the worst of our housing crisis make sure you study your states foreclosure laws and make sure you are aware of all the possible options you have in case this happens to you!

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Moe Bedard
Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

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