What is a mortage shortfall?
In some situations where you have had your home repossessed, or handed back the keys to your mortgage lender, you may later be told you still owe money. This happens when the amount your home is sold for is not enough to pay the outstanding mortgage and any secured loans.
Money you still owe to your mortgage or secured loan lender in this situation, is called a ‘mortgage shortfall’.
Sometimes the debt includes the monthly instalments and interest added to the debt while your home is being sold. Until the house is sold, you are liable for these costs, as well as legal and estate agents’ fees.
Lawsuits are filed to collect these debts:
In the case of outstanding rent, the creditor/owed party may have the right to file a lawsuit against the consumer to force payment of the debt through a judgment.
The lawsuit must be served upon the debtor according to the service of process rules of the state in which the consumer resides. Then, the consumer can defend the lawsuit by asserting various defences such as fraud in the creation of the account, or that the amount sought after is incorrect or has been paid, to name just a few.
If the case is not properly defended, then the creditor will obtain a judgment in its favour. When the creditor has a judgment, it may seek involuntary means to force payment such as wage garnishment, asset attachment or lien on the property.
How debt review can help those with a mortage shortfall
Using a Debt counsellors like ezDebt we will formally review your finances and develop a suitable monthly budget by negotiating with your creditors on your behalf
- Enables clients to make one monthly debt repayment
- Stops creditors from hassling you
- Decreases judgements against you
- Prevents you from declaring bankruptcy
- Maps out the path towards becoming debt free
If you’ve fallen behind with your rent payments, you should take action quickly to deal with the situation.