I own two properties. If the lender forecloses on one is my other property in jeopardy for collections?
I have 2 properties... 1 in New Jersey (vacation home), 1 in Pennsylvania(primary)... the property in NJ is 4 months late on payments (I am currently on a loan modification).... the property in PA is current on payments.... I can no longer afford the two properties and don't want to lose the house in PA.... if they foreclose on the house in NJ (which I see as the only option because even though it is on the market it is not selling) can anything happen to my property in PA even if I am current on payments?
Let us assume for the sake of argument the mortgage holder on the New Jersey property forecloses, sells the property at auction, and there is a resulting deficiency judgment. The deficiency is like any other unsecured debt and as such is legally identical to credit card debt, medical debt, or a payday loan.
See the Bills.com resource Collections Advice to understand your rights and liabilities in the situation you described if you take no action to resolve the debt.
You have options for resolving the hypothetical debt. See What Are My Debt Consolidation Options? for more information.
If the New Jersey property was your primary residence, I would suggest you review the Making Home Affordable program.
I hope this information helps you Find. Learn & Save.
Struggling with debt?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2023 was $17.06 trillion. Auto loan debt was $1.582 trillion and credit card was $1.031 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
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