that “moving from or leaving your home vacant prior to the foreclosure sale may cause a loss in property insurance coverage. Check with your insurance agent before moving out of your home.” In other words, if you leave the property, it may no longer be covered by your insurance. That leaves the home vulnerable to vandalization, criminal activity, and other problems. With few exceptions, homeowners who lose their properties through foreclosure behave responsibly. As we’ve noted, though, foreclosure can be emotional, especially for individuals already experiencing personal or financial stress. Some individuals are tempted to trash their homes and/or neglect basic maintenance and protection. Behaving vindictively can result in fines or even criminal charges. The lender or trustee might even decide to sell a damaged, run- down property for a lot less than what the borrower owes. You want the home to be in optimal condition, so that it will sell in foreclosure for the greatest amount and reduce your debt as much as possible.
DEFICIENCY JUDGMENTS
Following the foreclosure sale, whether the property is sold as an REO or to a new individual owner, the courts may grant a deficiency order against you if the sale price fails to cover your mortgage balance. For example, if your mortgage balance was $370,000 and the house sold for only $350,0000, the lender could ask the court’s authorization to collect the $20,000 difference from you.
POINTS TO REMEMB O REMEMBER:
• If you are in default of your mortgage, your lender — or the lender’s trustee — will schedule your house to be sold
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