Q: I owe $102,000 if the morgage co. sales my home for $80,000 do they hold me accountable for he difference?

A: It depends. Was the mortgage through a traditional bank or third-party or did the seller provide financing? If the latter, then no, you do not owe a deficiency. If this was through a regular third-party lender, then you do owe a deficiency but that does not mean that a bank will seek a deficiency. The bank has one year to sue. The one year starts on the date of the foreclosure sale. If you are not sued within 1 year then any action would be time-barred.

If you are sued, you can always prove as a defense that the home was worth more than the selling price at the foreclosure sale if it exists.

if you have no defenses, you may be able to work out a settlement of the deficiency with the bank. If that cannot be achieved then in the last resort you would file bankruptcy.

I would recommend doing nothing and see if you get sued. There are 2 kinds of people who face foreclosure - those who are having financial hardship of some kind and those who had investment property of some kind who no longer find it feasible to keep paying the mortgage (such as where the investment property lost value).

If you are in the first group, then chances are that you do not have a lot of assets that the bank could seize. In these cases, the bank may figure that you will file bankruptcy and they will get nothing anyway so they will not bother with a deficiency lawsuit. If you are in the second class then you may have significant assets and a deficiency judgment action may be much more likely.

If you wish to discuss your situation in more detail as well as your options for dealing with this, email me at rachelforjustice@#hotmail.com.