If you intentionally stopped paying your mortgage and let your home foreclose, can the bank garnish your wages

Question

You want your home to foreclose because this is a tough market to sell.

Answer 1

You didnt give enough information.  I dont know your state.  In Utah if your home is foreclosed they will sell it.  Lets say to make it simple.  You owe 100K and they sell it for 80K you owe the difference.  So you owe the bank 20K.  It will be registered as a Default Judgement in many states.

So with that Judgement they can garnish your wages, take it out of checking accounts ect.  

The problem is I dont know your state.  I give you an example.  In Utah its a default state meaning they can get a judgement for the difference.  And garnish your wage, in Arizona they are a non-default state meaning it doesnt matter.  They cant garnish your wages.

It depends on your state.  This is not a federal law its a state law.  Either google *your state default state* and read your laws.  Or give me your state and I will tell you.

Utah yes, Arizona no....

Where do you live?

Answer 2

Lets see a foreclosure wrecks you credit for 10 years, there are two scenarios, they go after you for the difference as in file suit thus garnishing wages tax returns etc. Or they write it off and it is viewed as income to the government in which case they go after you for owed taxes and at the bonus rate of 30% plus local, state etc. Next if you cannot afford the mortgage you have what makes you think your debt to income ratio, already carrying a mortgage will get you another one esp since the 100% financing no longer exists. If you have the money for a downpayment and closing why cannot you pay your mortgage? You are making an attempt at playing the system, problem is the system will play you. You will lose

Answer 3

Do you HAVE to sell?  

Just keep paying the payments and wait for the market to turn around. The housing markets have always had ups and downs.

It is real frustrating to those of us that are responsible, who took out loans and knew the terms. We also knew that the market would eventually go down so you don't plan on always being able to refinance.

To answer your question, no they can not garnish your wages. There are some that would rather other, more physical, things would happen.

Answer 4

Most mortgages they can file a lien personally against you for the shortfall.  The shortfall will include the mortgage amount plus all late fees and attorney fees and other costs involved in holding and selling the property minus the amount they receive when it finally sells.

You are much better off to either sell it and pay the loss (or go thru a "short-pay" process if you have no money).  This way there may be no attorney fees and such and also you will be able to sell it for more money because it will be in much better condition.

In Texas they can not garnish your wages but they may be able to do this in other states.

Answer 5

Yes they can as you still owe the debt on the house.  The bank will attempt to sell the house and use the proceeds to pay down the mortgage.  If there is still a blance they will come after you for it.

Answer 6

No, only the federal government can garnish your wages and I believe that is only in the case of back child support owed through the AFDC program.

No bank has the power to garnish your wages. What they do have the power to do is sue you and put a judgment against you. You need to look up the legal ramifications of having a judgment against you because I'm not sure exactly what all that entails.

If you DO let your home foreclose, be aware that there is a very good possibility that you will have a hard time being able to purchase a home for the next 7-10 years. Something to think about.

Answer 7

it all depends on your location but I would say no. It will destroy your credit but not your wages. Either way you are going to have to pay whether its now or later