What are the legal consequences of a foreclosure?

Foreclosure is the legal process of a lender repossessing a borrower’s property due to their inability to make their mortgage payments. In Massachusetts, the legal consequences of a foreclosure depend on the type of mortgage the borrower holds. For conventional mortgages, or those which are not insured by the government, the borrower typically is responsible for any remaining loan balance after foreclosure, as well as any costs associated with the sale of the home. This means they must make up the difference through payment, or have it collected through a deficiency judgment. For FHA or VA loans, the borrower is usually protected from a deficiency judgment, but still must pay any remaining balance. The foreclosure of a government-insured loan can also have an effect on the borrower’s credit report. These negative items often stay on the credit report for up to seven years, and can make obtaining future credit more difficult. Lastly, borrowers may be subjected to additional legal actions or fees. These may include other foreclosure-related fees, such as attorney fees, late payment fees, and mortgage insurance premiums. Furthermore, borrowers may be sued for any losses the lender incurs due to the foreclosure. Overall, a foreclosure can have serious legal and financial consequences for a borrower. It is important for borrowers to understand these implications and work with their lender as soon as possible if they are having trouble making mortgage payments to avoid foreclosure.

Related FAQs

How can I find out if I am a victim of wrongful foreclosure?
Can I get a loan modification during a foreclosure?
What are the steps in a foreclosure process?
Can I still make payments on my loan after a foreclosure sale?
What is judicial foreclosure?
What are the foreclosure timelines in my state?
Can I pay off a foreclosure in full?
What are the foreclosure statutes in my state?
How can I protect myself from foreclosure?
How can I find out if I am a victim of wrongful foreclosure?

What are the legal consequences of a foreclosure?

Related FAQs

Related Blog Posts