Will the bank sell the foreclosed property and forgive the mortgage debt?

Full question:

A HOME OWNED BY HER EX-HUSBAND AND HERSELF IS BEING FORECLOSED UPON. NEITHER PARTY IS INTEREST IN RETAINING THE HOME, A BANK DOES HOLD A TITLE ON THIS HOME, THEY HAVE BOTH BEEN SERVED PAPERS NOTIFYING THEM OF THE MONEY OWED, BUT NEITHER CAN PAY ON THIS HOME TO STOP THE PROCEEDURE. WILL THE BANK SELL THIS PROPERTY AND WILL THE MORTGAGE BE CONSIDERED PAID?

Answer:

Unless your mortgage has an exculpatory clause, you will still owe the debt after foreclosure. An exculpatory clause means that if the lender forecloses, they will only get the sale proceeds, and the remaining debt will be canceled. If there is no such clause, and the property sells for less than the debt owed, you will still be responsible for the remaining balance, including foreclosure costs.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

A divorce decree can affect property ownership, but it does not automatically override a deed. If the deed lists both spouses as owners, both must agree to any changes. The divorce decree may require one spouse to buy out the other or transfer ownership, but legal procedures must be followed to update the deed accordingly.