In some states, you can't go through an official foreclosure without being sued. In others, your lender can sue you after the foreclosure. While many owners are able to leave their homes without sanction, if you fail to respect your lender's right to reclaim the house, you could be sued. You also could be sued if you still owe money after the foreclosure.
Some states require lenders to foreclose judicially. This means that they bring a suit against you to claim the title to your property. Such cases run through a courtroom or, in some states, through a mediator's office. In many cases, you have the option of not attending the hearing, but you won't get the chance to defend against the foreclosure. When you live in a state that uses a non-judicial foreclosure process, you could still end up in a courtroom or in mediation if you challenge the foreclosure.
While you might not need to move out of your house the day after the foreclosure proceeding is finalized, you'll eventually need to vacate it so that the new owner can move in. If you stay past the date that you're told to leave, you technically become a tenant who isn't paying rent. So, the new owner can file an eviction lawsuit against you. Assuming that you don't provide a defense that lets you stay, the court may have the sheriff physically remove you from the property.
The foreclosure doesn't always erase you entire loan. When a bank forecloses, it takes your home so that it can sell it to pay off your mortgage. However, if the sale doesn't cover your entire balance, you may still be on the hook for the balance, called a deficiency. In some states, your lender can sue you for the deficiency, get a deficiency judgment and collect the balance from you.
It's understandable that you might feel a range of negative emotions during or after a foreclosure. You might even be tempted to take out your frustration on the lender that foreclosed on you by damaging or destroying the home. Unfortunately, since the house is the lender's property, you could end up in court if you damage the property. The lender could sue you for the damage or it could file an insurance claim and let the insurance company pursue you through its collections department. It could even pursue criminal charges for vandalism or theft.
- Federal Housing Finance Agency - Office of Inspector General: An Overview of the Home Foreclosure Process
- Nolo: Foreclosure Timeline: After You Get Notice to Leave
- Nolo: Deficiency Judgments: Will You Still Owe Money After the Foreclosure?
- The Tampa Tribune: Trashing Foreclosure Homes May Be on the Rise
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.