Can the bank go after our other assets if we foreclose our home we refinance the home once?

Hank
We bought our house 3 years ago in California. We refinance the house to 30 yrs fix 2 years ago and now the house lost more than 40% in value. We are planning to foreclose the house. We are wonder if we do, can the bank take us to court and take away some of our other assets or our money from saving.

Arnette
Yes, unless after foreclosure you declare Bankruptcy. Chapter 13 limits the amount they will get and Chapter 7 liquidates all your other assets over a certain amount and pays this to all your creditors.After foreclosure, if the bank is still owed funds, this is then an unsecured debt that you still owe them and they have every legal right to pursue you for it.Unless you've lost your job, or really cannot afford to make the payments, do not let the house go into foreclosure. It may take a few years to regain its lost value but it will happen and why destroy your credit because you think you are paying too much now? How about your car; it is not worth whatever you paid for it (unless it is a collector car), do you drive a car off the lot and abandon it immediately because of its lost value?

Concetta
You don't foreclose a house. The bank reports on the loan default and arranges with government authorities to have a "sheriff's sale" at which point the house may or may not get sold. If it gets sold, it may or may not cover the balance of the mortgage. If it doesn't, the bank will still have a "judgment" against you and can go after other assets, but would have to file suit to get those other assets. It is possible that the house COULD remain under your name, with you continuing to be responsible for things like taxes and fees to the Government.

Bernie
It depends on the term of the foreclosure, but generally, yes if you have other assets, they can sue for the unpaid balance on the loan and get a judgment to collect from those assets. They cannot get 401k or retirement accounts, and they cannot collect against social security payments. Sometimes you can get the bank to accept a deed in lieu of foreclosure, and the will forgive the balance of the debt.If it is just a matter of the house being too expensive right now, call the bank and see what programs they might offer to help you keep the house payments up until the market comes back.

Felecia
The short answer is yes, they can. The longer answer is not whether they can do it legally, but will they do it. There is no way of knowing whether they will come after you for any difference owed.

Catarina
In general your loan should be non-recourse in CA, meaning if the lender forecloses on the loan they can not go after other assets, but if you refinance to one of those 100% Wacky loans it may not be non-recourse

Elvin
You did not say you were behind on you commitment. I think CA is a no recourse state but not sure. Your homes value will come back in time

Dorian
When you signed loan docs the collateral was listed on the loan docs. This is normally the only property the lender will come after if they have to foreclose.There are two types of foreclosure procedures in most all the states.#1 Judicial Foreclosure-Under this foreclosure procedure the lender files and sue you for foreclosure through the local courts. If this procedure is used the law allows the lender to make up any short comings on a sale by going after the person being foreclosed on called a deficiency judgment. Then yes the lender will come after additional funds from you to make up for the short fall.The question is will they? They would have to go back through the court system to file for a deficiency judgment. With the backlog on the court system even if they could and is allowed to would they? This procedure normally allows the person being foreclosed on a redemption period in which they can reclaim their house, even after the foreclosure has been completed, this period could be anywhere from 30 days to 1 year depending on the state laws of your state.#2 Non-judicial foreclosure (Used by most lenders-especially in California) Under this procedure there is no court. A notice of default is sent to the person in foreclose. After approximately 90 days and failure on the part of the person in foreclosure to take any action to refinance or sell the property a notice of sale is sent to the person in foreclosure. After about 20 days and again failure of any action on the part of the person in foreclosure the lender will have a foreclosure sale. At the sale they try and get the minimum of the balance of the mortgage as well as any cost incurred in the foreclosure procedure.Under this procedure the lender will not normally go for a deficiency judgment. They accept the collateral of the house for what it sells for. If the property does not sell for the balance of the mortgage, then someone had to have gained from the sale. The person that gain is the person in foreclosure. If this occurs then the lender sends a 1099 to the person in foreclosure indicating the amount of the gain.So your 401k, bank account and any other property or assets you own or buy is normally will not be touched or pursued by the lender. Under this procedure you do not normally have a right to redeem your property.I hope this has been of some use to you, good luck."FIGHT ON"