If my house gets foreclosed can the mortgage company go after my 401k money? - CA.

[m3nd3rr]

What is the name of your state? Ca. I am 2 going on 3 mo.s behind on my mortgage due to a loss in income. If my house gets foreclosed on , can the mortgage company go after my 401k money? Or if I do a short sale can they go after my 401k money for the remaining balance?

[seniorjudge]

If anyone gets a judgment against you, that someone can latch on to all of your assets.


(That is the general answer and there are lots of exceptions.)

[tranquility]

The question is difficult as there are many variables, but if you lose your house and get a judgment against you, what other assets do you have? If none, you can go bankrupt which will generally remove the judgment against you and the 401(k) is a protected asset.

[HUD-1]

If you end up doing a short sale, they generally do not pursue a deficiency judgment. Get it in writing if you go that route.

[BriantheBanker]

I would suggest requesting a short sale. A short sale is a payoff, not a charge off or foreclosure. (of course get a letter of intent from the servicing agent/ mortgage company.)
You would want the letter to include the short sale payoff amount, good thru date & intent to DISCHARGE the mortgage when funds are received.
Your second is secured with your house. the terms of the loan are based on the security/collateral. You can NOT sell the house without discharging all liens. (of course there is someone looking for a loop hole to jump on me about so here is an obvious one...
if you could find some crazy title/ escrow company to insure over the lien you could possibly sell; but on a current, verifiable lien, they wouldn't.

Options to consider: 1. pull equity out of another house to offset the amount of negative equity in subject property. 2. borrow against your 401(k) to offset &/or satisfy liens/ neg equity (if notice of default occurs.)

good luck!