When Walking Away From a Mortgage Does Not Lead to a Lawsuit
- 21 hours ago
- 1 min read
Special Episode 1, Short 2
State laws can make a major difference in what happens after a homeowner stops paying a mortgage. Mitchell Sussman explains that in states with anti deficiency laws or the one action rule, a borrower may be able to walk away from the home without personal liability for the loan. In those situations, the bank’s only option is to foreclose on the property and it cannot sue the borrower for the remaining balance, even if the loan was hundreds of thousands of dollars. However, many states do not have these protections. In those places, lenders may still sue borrowers for the unpaid loan after foreclosure. Understanding the rules in a specific state is critical before making any decision about leaving a home or dealing with mortgage debt.
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