Deficiency Judgement Or F... You, Pay Me.

Yo People.
Ray Liotta's character in "Goodfellas" said it best, "F... you, pay me! That's what's going on in the foreclosure and short sale world. You fall on hard times and you can't continue to make your mortgage payments. The bank says "give us 'da money". You say "I can't. I lost my job, I have a sixth grade education and a broken hip". The bank says "we'll take your house you expletive". You say "that sucks, but I understand & you gotta do what you gotta do". So, the bank either forecloses on you or maybe they'll allow you to do a short sale. In either case, you could owe them the deficiency amount. Huh? You could owe the bank what they eventually lost.
If you owe $300K and the bank only gets $200K (just simple math, there are all kinds of fees and expenses but it's all bottom line stuff) you will potentially owe the bank $100K. But you got the house? F... you, pay me. You said I could do a short sale? F... you, pay me.
Here in California there is a situation where you will not owe that deficiency. It's called non-recourse. It means if the money borrowed was used to purchase your home (not money to remodel, send kids to college or fix your broken hip) the banks have no recourse to come after the deficiency. Nice.
If you are in that situation where your mortgage is becoming too unbearable you need to talk to your accountant, your realtor and perhaps a bankruptcy attorney. These people will protect you as much as possible.
Read the article from CNN Money by clicking on the title.
God Bless.