Forclosure deficit... recourse state

[loser100]

I live in Colorado and am currently in Foreclosure of our primary residence. We have moved out of the house and it is up for auction with HUD and our lender US Bank. (This is an FHA loan which we have paid mortgage insurance on for 10 years) My husband believes that because Colorado is a recourse state, that we will owe the deficit that will surely result after the sale of the property and what we currently owe our lender. I would appreciate knowing if this is correct and if so would declaring bankruptcy wipe away that debt? In addition, typically how long after your home auction is completed can you expect to be billed for the deficit/fees. I appreciate any and all advice.

[HUD-1]

Generally HUD/FHA does not pursue deficiency judgments. The only cases I have seen where the feds went after somebody was when there was some type of fraud. The lender will send you a 1099c stating the deficiency amount. You will have to do some research on the potential tax consequences.

[loser100]

Originally Posted by HUD-1

Generally HUD/FHA does not pursue deficiency judgments. The only cases I have seen where the feds went after somebody was when there was some type of fraud. The lender will send you a 1099c stating the deficiency amount. You will have to do some research on the potential tax consequences.

Thank you for your post. I was hoping this was the case since we had been paying the mortgage insurance all these years... I mean isn't that what it's for but to cover the deficiency? If anyone has any conflicting info please let me know. Again, I appreciate the help!

[HUD-1]

The mortgage insurance you were paying protects the lender, NOT you. The lender will get paid off 100% by FHA. You are merely fortunate that the feds normally don't pursue deficiency judgments.