If you buy a new house and walk away from your old one, can't they put a lien on your new house?

Question

My sister wants to get a new home and walk away from her old home. Can the bank connected to the old house do anything to the new home such as put a lien on it in order to collect the debt or do anything?

Answer 1

They will foreclose on the old house and sell it.  If the sales price doesn't cover the mortgage, your sister owes it.  The bank can sue her for it.  If they get a judgment, thet can place a lien against a new house.

Your sister has no chance of getting a mortgage for a new house if her old house went into foreclosure.

Answer 2

Besides all of the comments above, if she can afford to buy another house, with downpayments, moving costs, etc., why would she just walk away from her old house?  She should sell it so that the bank gets paid what they are owed.  If the house is worth less than what's owed, she can either try a short sale with the bank (although it doesn't sound like she is in too distressed of a situation if she can buy another house, which means the bank will not allow a short sale), or pay the difference in what is owed to what it sells for.  The bank isn't a charity, and your sister committed to an obligation that she should live up to if she can.  Anything else is pretty disgraceful.    

Answer 3

I don't know how she will be able to buy a new home while having a mortgage on one already, unless she has a huge down payment.....

Answer 4

she can get a new home but the sale prob wont be complete until she pays off the old one or they can very well put a lien on her new house if she defaults in payment...not a good idea it'll s***w her up for the rest of her life! instead of walking away maybe she can keep it and rent it out until she can pay if off..

Answer 5

Depends on the contract she signed. She would have a very hard time getting a loan unless she can prove that she has the income for both mortgages, or that she has a renter in the old home.

As far as the question on the lien, that can try, but they would be in 3rd position (or more) depending on what other liens are on the property. Also, walking away from the old house will cause a HUGE ding to her credit, and she would have a hard time refinancing (especially if she has a loan that will require PMI). Quite a few thing to think about.  

Answer 6

She is still obligated to pay off her debts to the bank.  Yes, they will do what is necessary to collect the money that is owed to them.

Answer 7

between old and new one your sis still respond for that .the bank can not link or do any thing to the new your sis house , if she did not pay while she still own the old house be aware she will has a bad credit lost her old house

Answer 8

If your sis owes money to the bank, the bank will do anything they can legally do to recoup that money.  That would include garnishment of wages and placing a lien on her new home.  Why doesn't she sell the old home, and how in the world can she get a loan for a new house if she's walking away from her present one?

Answer 9

Mortgage is a lien against the PROPERTY not the INDIVIDUAL.  THe only time a lien can be put against the person is in the case of a judgement (lawsuit).  So make sure you talk it over with a lawyer, financial advisor so that you know the best way to sell your home and buy a new one.  There are tax advantages ie 1031 that will help with avoiding paying taxes on benefits from the sale of the property.  

Answer 10

Not to worrie........she won't be able to get a new house........no one in their right mind would give her a loan..........

Answer 11

Yes, the bank will go after all her possessions such as bank accounts(including those accounts that she is added to as a partner), car,  new house etc. The better way to do it is sell the house, foreclose through the bank then buy the new house. Bare in mind that foreclosing a house will mess her credit history up and it will be harder to get a new mortgage  

Answer 12

She will have to qualify, and show she can afford two , again two houses.  I keep hearing this.  If you own five homes you can buy a sixth,,,,,,,,if you have enough income to keep paying on the 5 u already own, and qualify for the sixth.  So,,,,,, very simple if she has enough good credit and income to show she can support two mortgages yes, else no.

One other thing -- the credit crunch.  Mortgages no longer easy to get.  Same thing for auto loans, better have a high score, no docs, and same co. giving first and second to avoid private mortgage insurance are long gone.  Hard to get a mortgage in Aug. 08 period w/o down pmt and stellar, stellar credit.

Also, of course, if she defaults on the mortgage and lies on an app, has someone make believe by phone for instance she has a second job, for verification purposes, not only would she be civilly liable, but criminally liable.  Now if she can afford two houses per cr. report and buys 2nd home and defaults on first , yes she is liable for judgement and lien on new home, some states if lien is big enough can force you to sell home.  She is playing with fire.

If has problems paying for first home contact first lenders mortgage mitigation dept., you did not say if it was she did not like home , or it was a problem paying.  If problem paying, mitigation dept. all banks have them, see if can get loan modified.  Never hire third party for this, will take money and run, unless they agree to accept fees after performance of services, new laws going this way on so called mortgage mitigation policies.

She better get educated fast.  Could make big mistake here, effecting her credit and family situation for years to come.

Answer 13

She can do this.  BUT!!!!!!!!!!  the old lender will come after her (AND SHOULD) and the IRS will tax her on the loss.

I really wise banks would be a lot more firm on this type of situation.