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Showing posts from January 26, 2012

MORTGAGE LOAN DEFICIENCIES

Homeowners are not always "out of the woods" once their home is lost to foreclosure or sold by "short sale."  Foreclosures and short sales remove  the mortgage lien from a property, but do not eliminate the debt described in the note or loan agreement, or it's promise to repay the debt in full. That remaining balance due is the "deficiency." Contrary to public perception, banks are not only allowing short sales and completing foreclosures,  but they are still looking to borrowers to satisfy deficiencies well after closing.


The Illinois Appellate Court has started the new year with a "win" for mortgage lenders. The Court confirmed  a bank's right to pursue it's borrower for everything that was due and owing, over and above the recovery from a foreclosure sale. Banks can be awarded deficiency judgments as long as borrowers are given proper notice of the fact that they were being sued.   This case held specifically that even a notice (…