In my job I often find that instead of trying to explain things myself it is better to simply cite the best resources out there already. It’s not what you know, but who you know, right?
As is typical for them, the Minnesota Home Ownership Center has just put together a great post describing how sellers that lose their house through foreclosure (or even via short sale) can be sued by the lien holder (bank) after everything is done.
It comes down to this: if you are having troubles making your mortgage payments or are considering foreclosure or a short sale, you need to do some research and speak with an expert. The sooner you reach out for assistance the more options you have available to you.
How much of the time does a bank do that? Do they just go after the people with very large debts, rather than a typical homeowner that defaulted? I did not know banks could do that. Thanks for the info.
Banks have 3 years to do so. Since this hasn’t been a big issue in the past, it is unclear what percentage of banks will go after the owners and under what conditions. Time will tell!