The American Bar Journal has a good article on banks going after borrowers for the shortages between mortgage dollars borrowed and what the homes can be sold for. Under the terms of mortgage notes, the borrower promises to repay the entire debt borrowed. But with so many houses under water, the lenders are losing money, and so they are are looking to the borrowers for the difference. Forty-one states in the US allow this. So we need to watch name searches for deficiency judgments. But will this just force more people into bankruptcy – or will they really recoup some money?
FNMA Mae has specific rules pertaining to the right to file deficiency judgments. Will they follow up?