defaulting on a mortgage in connecticut
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defaulting on a mortgage in connecticut
I own a home in south Carolina and one in Connecticut we cant sell. I’m trying a short sale on the Connecticut home with no help from the mortgage company. I just want to return the deed to them and do a strategic default. I believe Connecticut law allows me to do this with no repercussions from the mortgage company. They say they won’t take it unless we go through the short sale process. Should I just send it to them anyway.
randy
Asked on December 19, 2016 under Real Estate Law, South Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Unfortunately, CT allows what is known as "deficiency judgments." That means that the mortgagee/lender has the right to come after you for any remaining balance after the home is foreclosed upon and sold at auction. E.g. say you have $300k left in principal on the loan, and after foreclosure, the home sells at auction for $195k, with $10k in costs of sale--the lender can then go after you for the remaining $95k. That's not to say they will, but they can: you don't have the right to give the home to the bank and walk way, unless the bank itself agrees to this (to accept the home as satisfaction in full of your debt).
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