Thursday, October 4, 2012

Can the Bank Garnish a Senior Citizen's Retirement Income in the Process of Recovering a Deficiency Judgment from a Foreclosure?

Question: I co-signed for a mortgage for one of my kids and they are now in a foreclosure. What can the bank do to me if foreclosure goes forward? I am a retired senior citizen and I have a mortgage with no equity. I have a military service retirement income and a social security income. Please let me know what I can do.

Response: Since you co-signed, you are financially obligated under the note and mortgage. You will be a named Defendant in the lawsuit and if foreclosure goes through and the bank tries to recover a deficiency judgment for the amount owed to the bank after the foreclosure sale takes place, the bank will be seeking how to actually recover that money. Your pension and retirement income cannot be touched. You have a home without equity but the bank can still record a lien against it in hope of recovering its money when you decide to sell your home. You can't sell your home with a lien on it. If you keep living there, then the lien will just stay there but you can continue to live in your house. If your kids have assets, the bank may go after their assets instead. If your kids are not planning to fight to save their home, then they might as well do a short sale or a deed-in-lieu of foreclosure to avoid the deficiency judgment.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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