I have a house I need to get out from under. I may foreclose on it. Or, do a deed in lieu of a foreclosure. I want to file hardship due to the loss of my brother, whose income I depended on to pay for the house. My husband just passed away on the 3rd. I am living in his house. I cannot keep two houses. Can my mortgage company come after me for any money I received as a beneficiary?
Not a pro on this but it was my understanding that many mortgage contracts were ‘non-recourse’ in the states. Meaning that lenders only have recourse to the house the mortgage is on. not your personal assets.
So I think it may be a no.
However check with a solicitor – who can more finely comb the details of the mortgage contract.
Once you receive money, it’s yours, and any creditors you owe money to, can potentially get their hands on it.
Doing a “deed in lieu” is really not a good idea EVER. That means, you give up all ownership rights to the property – but you STILL owe any debts related to the property. A deed in lieu doesn’t get you off the hook FINANCIALLY, it just gives up your property rights.
So yes. If you go into foreclosure, you can and will be sued for any balances after any auction, and they’ll be able to attach ALL your assets to get paid.
It’s probably a better idea to put that house for sale as fast as possible, lower the price $ 5K a week until it goes, and use the life insurance money to catch up/keep up with the payments until it sells. You’ll get more money for it that way, than you will from a foreclosure – that means, after you get rid of the house, you’ll have MORE money than you would have, after the foreclosure/collections bit.
“File hardship”? Where?
Once you receive insurance beneficiary money, it’s just your money – period. The question of whether the lender can “come after you” stands on it’s own. The source of your money makes no difference – it’s not shielded any differently from the rest of your money.
If the lender sets a lien on you they can take anything of value to satisfy the debt.