Foreclosure has many harsh realities, even if you lose your home through foreclosure you may still be personally liable for the difference between your mortgage loan balance and the current market value. The difference owed to the lender is also called a deficiency. In California there are anti-deficiency rules that might protect you from personal liability, but it also depends on a case by case basis.
If it is determined that you are responsible for the deficiency owed to your lender, the lender can obtain a judgement against you and potentially garnish your wages among other things.
You may not be protected against personal liability under any of the following circumstances:
Second Mortgage – If you have a second mortgage and the first forecloses you are still responsible for the deficiency
Fraud – If you committed fraud in anyway when you acquired the loan you may still be held responsible.
Damage the property – If you dame the property in anyway prior to vacating it, you may still be liable.
FHA and VA Loans – If you have a loan insured by the government, you may still be liable for the deficiency.
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