What is Forclosure
When a homeowner purchases a home; the lender will secure a deed of trust out on the property for the amount of the loan; this action is taken to secure its investment on the property. If the homeowner fails to make the mortgage payment, the bank has the right to auction off the house to regain its interest in the property. If the bank cannot receive all the debt owed to them at the auction, a deficiency judgment could be granted and the bank could hold you personally liable for the debt that was not recovered. Both a foreclosure and a deficiency judgment have serious consequences to a homeowner financially and could disqualify the homeowner for any type of loan in the future.