Non-recourse mortgage state?

[kwaters125]

What is the name of your state? Florida

[FlyingRon]

Nope, mortgages in Florida are with recourse. A deficiency action is possible.

[amateurlawyer]

I'm in NM and did a "rates and terms" refi that got me into a PRIME 5-yr ARM that resets December 2008.

MY understanding (per a FNMA) table, is that my state is a "recourse state" for foreclosures on primary residence.

FNMA says that JUDICICIAL foreclosure can be started 4 months after default with a CIVIL COMPLAINT, meaning they need to sue me personally and it will be a up to the judge hearing the case to decide what if anything i owe the lender.

Can they demand from me more than the original loan amount? When i did the refi, my LTV was dropped to 80% (because property appreciated at that time), so the refi loan amount was less than the original loan amount and i got NO cash out of the refi which it was done primarily because i wanted to be selling the house within 5 years and wanted to stop paying PMI ... but now it's getting very hard to sell.

A lot of people are walking away from their houses here. Are judges making them cough up money to pay the lender? My financial situation has markedly detriorated since the refi because i'm on disability from SSDI. My IRA should be free from judgement, but can they wipe out my brokerage bank account (all my liquid assets) that the mortgage payment comes out of through automatic payment?

Can i get a break for being on disability and a dramatic drop in annual "income" from 5 years ago???
Please advise.

[FlyingRon]

Please do not dredge up months old threads and tack on your marginally related questions.
Create a new thread.

But to answer your question:

Can they demand more than the original loan amount: Yes, there is additional interest that accumulates and they are also allowed to collect the legal fees related to having to pursue you.

A deficiency judgment is possible and likely. How actively the lender will try to collect on that judgment is uncertain.

Your best bet would be to refi or otherwise find a way to continue paying on the loan.

If your earning ability has declined, then you might find the lender amenable to a short sale or deed in lieu, but that's up to them. They usually won't consider this until you are in default and by then you credit is pretty trashed.

People may be walking away from houses, but they're not walking away from the financial problems that they may be in.