As a result of the Great Recession, many homeowners and would-be real estate investors found themselves facing foreclosure of “underwater” properties by banks and other lenders. After losing their property, many borrowers heard nothing more and thought their ordeal was over. They did not realize that, since the bank sold their property for less than the mortgage balance, they were also liable to the bank for the deficiency – the difference between the value of the underwater property and the full balance of the mortgage (including penalties, interest and legal fees).
Protecting Yourself with an Asset Protection Lawyer
Lenders obtained these deficiency judgments and waited until the borrowers rebuilt their lives; got jobs, bought new homes and opened savings and investment accounts. Often the banks sold the delinquent mortgages and the deficiency judgments to collection agencies and to hedge funds that specialized in “distressed debt instruments”. The largest holder of distressed debt instruments and deficiency judgments is Fannie Mae, a U.S. government owned company. As you will learn from this Reuters news release, Fannie Mae and other lenders and collection agencies are now aggressively pursuing the borrowers, enforcing the deficiency judgments, seizing homes, accounts and other assets and garnishing wages. Just when you thought it was over, it’s not. Borrowers who have rebuilt their financial lives must protect their assets now, before their past comes back to hurt them, again.
For more information, please contact an Asset Protection Lawyer today.