Will the banks garnish my wages if they foreclose my two homes?

I have four houses, three of them are being rented out. Unfortunately, because of this housing crash I can not sell two of my houses. Financially speaking, I can not make the payments for the four houses. I am obligated to sell two and save the other two houses. I want to know what the banks will do to me if I go into foreclosure. At this moment, I am not concerned with my credit anymore since I already know that my credit will be trashed. Will the banks try to garnish my wages or what are the other negative outcomes of foreclosures?

Since these are investment properties the bank will most likely come after you for the remainder of the amount owed after they sell. For example, if you owe $500,000 for the 2 houses, the bank will foreclose. They will tack on all their legal fees to the loan. Figure $20k for that. You now owe the bank $520,000. the then sell the properties for $400,000. You will owe the bank $120,000.

Good Luck!

Erm, Yah!

Hello,

I would like to give as much as answers I can for this topic (if I run out of space, I will try again, or if it is allowed, you can send email to me and discuss):

1. Different states have different laws and rules regarding foreclosures - there is no "one answer fits all" solution

2. Please be sure for the answers that I will need from you:
a. Did you purchase any of the two properties with no money down, or some money down?
b. Or were any of the two properties you are concerned refinanced, or first time financed?
c. Are you the only one have the financial obligations for the loan(s)?

3. With full answers from above, I will then be able to give you more up-to-the-points answers. Absent from above, if you live in the state has "judicial foreclosure" rules, the bank(s) can get a judgment to collect shortfalls from the foreclosure sales.

4. If you have not contacted one of your local real estate agents yet, please consider to consult with professionals, including real estate agents.

5. Perhaps you also want to consider "short sale", which will avoid foreclosure, and only reduce your credit scores by 75 points or so, and will have minimum impacts on your credit report; while foreclosures will reduce your credit scores by 250 points or more, and will have negative impacts on your credit report for up to 12 years.

6. I practice real estate. I have three listings at this moment with "short sale" status, two of the three "short sale" listings are now in escrow, and both listings required the lenders(banks) to take a substantial loss on the loans, and only impact negatively on the borrowers (as mentioned before, about 75 points reductions in credit scores). While the bankers have a very tough time to decide whether to accept the short pays, the borrowers are under lesser pressures at this point.

The actual answer to this question depends on whether or not you owe any unpaid balance of the mortgage after foreclosure; look in the legal documentation for the mortgages on your houses. However, chances are about 99.99% that you do owe any unpaid balance. In that case, your wages can be probably be garnished. You should think about negotiating a deal with the banks where they take whatever you can sell the two houses for and agree not to hold you responsible for any unpaid balance. Sometimes, banks will agree to such deals, depending on circumstances.

Ask the lender if you can do a short sale. If allowed this will help some but not all of your obligations for the two loans. What can happen is the lender can put a lien against the properties which would have to be paid off before you could purchase any other properties. They don't necessarily garnish you wages but why put your other 2 properties in jeopardy? I know you said you didn't worry about your credit but I would definitely be concerned about the two properties you want to keep because its a small world in the lender environment and your lender can pull your credit report at any time and see everything.

Why did you take the mortgage if you knew you could not pay increased mortgage payments, without relying on re-financing in the future?
House flippers caused inflated house prices, which made it very difficult for first-time home buyers to afford a home.

If I were your lender, I would try to get every last penny owed.

I assume that you have some equity in two homes you do not want to sell. You could sell those two homes too and pay off your contractual obligations.

It may be too late - you don't say how far down the road to foreclosure you have gone, but there is an alternative to repossession. They could contact one of the sell and rent back companies that will give you a good price for your two unlet houses and save your credit being trashed.
I can thoroughly recommend Sell to Stay as a company that will give you 80% of the market value of your houses in a very short space of time - they have bought properties in under 14 days in the past!
It's worth looking at their website at http://www.sell2stay.com

Best of luck Bigpathome.