Will my mortage company try to garnish my wages if i foreclose on my house.?

Answer 1

Not only am I simply volunterring my time to answer questions for customers that are facing credit issues, I take pride with the services that I provide. I do not appreciate someone of no importance marking my company into a category of "lack of intelligence, or fraud". I am Mortgage Banker, and have been in the business for over 8 years, and have had a Credit Repair business for over 4 years. Please read this statement from foreclosurefish.com:

One of the more common fears among homeowners facing foreclosure is that the bank will suddenly start garnishing their wages in order to pay back the loan. With how far behind some homeowners fall, this fear can result in the anticipation of their not having enough money to pay the bills, keep the lights on, or feed their children. Especially if the income situation has deteriorated quite a bit, there may just not be enough money to pay the mortgage at this point.

However, the good news is that banks can not garnish a homeowner's wages during the . The very simple reason for this is that the real estate is collateral for the loan -- no other assets or future income source is pledged. If a car loan goes into default, the car is repossessed first; same with a mortgage in default: the bank can only take back the collateral that is pledged on the loan and there is no recourse to any other asset or income source.

Thus, the bank will have to take the property all the way through the foreclosure and have the court order it to be sold at a county sheriff sale. This auction is the legal mechanism by which the bank is allowed to attempt to recover the amount it is owed on the loan. If the sheriff sale pays off the mortgage in full, there is nothing further to collect.

If the property does not sell for enough to pay the loan off completely, some states allow mortgage companies to sue for a deficiency judgment after the foreclosure. Again, not all states allow this under the foreclosure laws, but it would give banks the right to garnish wages after the foreclosure, if they decide to sue for the judgment. But again, this comes only after the sheriff sale, and there would be no wage garnishment during the foreclosure process itself.

Banks rarely, if ever, sue former clients for deficiency judgments, though, because they know foreclosure victims do not have a lot of extra cash to pay down another judgment after losing their homes. It would take the bank too much time and money to sue again, when they did not collect very much on their original foreclosure lawsuit.

Lenders, of course, do nothing to dissuade homeowners from having the fear of wage garnishment. In fact, being sued after foreclosure, and the threat of losing their job, income, or other assets is often used by customer service representatives of mortgage companies to compel homeowners to keep making payments, even if they can not afford to do so. But foreclosure victims do not have to fear that the bank will come after their income during the foreclosure, and will not have to worry about the possibility even after losing the home.

Nick is a writer for the ForeclosureFish.com website, which is dedicated to providing homeowners with the foreclosure advice they need to save their homes. The site offers hundreds of pages to visitors, describing various methods available to foreclosure victims, such as short sales, deed in lieu, and equity loans Visit the Foreclosure Fish site today to download a free e-book and start learning how to prevent foreclosure: http://www.foreclosurefish.com/

Garnishes wages will only take place if you owe child support, or student loans. Other then that, no. What you should try to do is contact a Foreclosure attorney in your area immediatly, and have them negotiate a deed in leui. Basically what this means is that the attorney will negotiate a settlement with the lender of your home in order to buy back the loan for the original loan amount that you purchased it. Yes, you will loose any equity that you have stored up, but at least it will not ding your credit with a foreclosure. This is your best route, take advantage of that oppurtunity.

Best of luck!

The above is entirely incorrect. Wage garnishment is just one of many frequently used and legal methods to collect a debt of any type. There are limits to how much of a persons wage may be garnished (normally 25%).

The idea that the very well experienced and strong financial community is simply unable to enforce and collect debts...and would give away much of anything because you ask...should seem absurd to even the casual reader.

(I would note that I believe many of the above posters comments I've seen are simply wrong and ill informed, perhaps stemming from being seen originally in her commercial context postings trying to entice people to use a service that claims to get rid of or reduce debts.....all of which have been identified as scams preying on the vulnerable by most every Consumer group I've ever seen). And while he has recently modified and expanded his previous answers...the commercial nature (not allowed here, but apparently something he disregards) are still reason to question...and to claim universally that garnishment is very restricted (or the financial industry and all those caring bankers don't do whatever they can to collect, or that a stockholder in one wouldn't sue their buns off if they didn't)...is still absolutely incorrect. However I agree there are a few exceptions: A few states in the US restrict garnished wages to a few types of debts. Specifically, North and South Carolina, Texas and Pennsylvania allow garnished wages only for federal or state tax debts, child support, defaulted student loans that are federally guaranteed, or for compensatory damages decided by a court during a criminal or civil law suit. The exception though, not the rule.

AND NOW MORE TO YOUR SPECIFIC Q:

First, you don't foreclose on your house, the lender does.

If you are foreclosed, which is a time consuming and expensive process for all, and the property does not sell and provide enough funds to pay off the accumulated debt, missed payments, accrued interest and all cost of foreclousure...yes the lender can get a deficiency judgment and collect the rest you owe by any legal means. Garnishment is one.

As wierdly put above, a good alternative, if you cannot afford to pay the mortgage and the house is not worth enough that simply selling it will pay off your debt, is to try and arrange a "friendly foreclosure". This is commonly done by arranging to give the lender a "deed in lieu of foreclosure". Basically, to avoid the costs to all, and problems of foreclosure, and the deterioration of the property over the time, and that selling foreclosed properties generally receive less $ than a normally marketed one, you arrange to do it on good terms with the lender...seriously try and sell the property for them even, maintain it, etc....and simply give them the title...in exchange for them accepting it as payment in full, (or some agreement), on the loan.