questions & answers

Question: Due to piling credit card debt and a recent diagnosis of cancer I may be headed towards foreclosure on my condominium. My question is if I cannot save my home will I be subject to any deficiency judgments against me because my residence is a condominium? I've read about if the property being less than 2.5 acres and a single family dwelling is safe from deficiency judgments. Do condos fall under the same protection? Is there anymore light you can shed on this situation for me?

Answer: Yes, condos fall under the anti-deficiency judgment statute as they are a residence on less than 2.5 acres. So as long as your loan(s) are purchase money--that is money obtained from the bank was used to buy the condo and not used for something else like paying credit card bills or buying personal items. The statue will also protect you if the lien holder forecloses on your condo via a trustee sale. Since that is mostly likely the case you are almost surely safe unless you have a 2nd mortgage that is a line of credit, sometimes called a HELOC, and you used the funds from the line of credit for purposes other than buying the house. If so and your 1st mortgage forecloses via a trustee sale you theoretically have exposure. However, even in that instance, it is unusual for a 2nd lien holder to sue individuals for the deficiency. The money spent to pursue the deficiency rarely justifies the return. If it does occur contact a lawyer right away and asses your options. Good luck.