Can a borrower still owe money to their bank even after losing their home?
If you’re thinking if a borrower can still owe money to their bank even after they lose their home in a foreclosure or short sale, the answer is Yes. You can still apply for a mortgage even after surrendering your house to the bank. We are all aware that the year 2008 has been a difficult year since it is when we experienced a drop in real estate values, start of a prolonged recession and rising unemployment. Because of these conditions, it mostly affects the homeowners which led them to have foreclosures. For some homeowners, they opt to sell their home for a lesser price than what they owe to the lender instead of having it foreclosed. It is called the short sale.
After selling your house as a short sale, you can still obtain another mortgage. However, there are some certain conditions that are needed and will require you some hard work to renew your credit score and get another mortgage. Before applying for a new home loan, you must review what lead to your short sale to prevent from experiencing another short sale again. You might need to review your financial income and assess yourself if you’re already able to avail another mortgage.
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