What legal actions can the creditor take after repossessing my mobile home?
We purchased a mobile home in 1999 and are unable to continue to pay the payments and are going to be forced to allow the company to foreclose or repo the home. We do not own the property it is on a rental lot. We live in WV. What legal actions can they take after they take possession of the mobile home?
When a home is foreclosed upon, the property is generally sold at auction, and the proceeds of the sale are applied to the balance of the mortgage loan. Any balance remaining on the mortgage after this process is referred to as a deficiency balance, and could be a substantial amount depending on the current balance of the mortgage and the value of the home. The answer to your question of whether or not the mortgage lender will be able to pursue the co-debtor for payment of the deficiency balance greatly depends on the state you live in, as some states allow mortgage lenders to collect on deficiency balances, while other states do not.
Rather than allowing the home to go into foreclosure or surrendering the property to the lien holder, you may want to consider selling the home; selling the property should cause you fewer problems than allowing the property to go into foreclosure. If you owe more on the home than the property is worth, you may want to consider a short-sale, in which your mortgage company would accept less than the full balance of the mortgage to settle the debt.
You would then sell the home and pay the mortgage company whatever you received, and the mortgage company would forgive the remaining balance. If you are interested in a short sale, the first step is to contact your mortgage lender to find out if this is an option. You can only proceed with a short sale with the consent of the mortgage holder, so it is imperative that you communicate with the lender. To learn more about this option, see A Deed In Lieu Of Foreclosure vs. A Short Sale.
West Virginia Deficiency Balance
Under West Virginia law, a deficiency judgment may not be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage or deed of trust secures.
Therefore, the good news is that you will be able to walk away from the mobile home and not be liable for the deficiency balance. However, you will have to contend with a serious black mark on your credit report.
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