1. Is the owner liable to continue to make payments.
2. Can the owner claim bankruptcy if he is financially ruined due to attorney fees, etc. - and will this alleviate him of his responsibility to pay for the house (which he no longer owns) forever?
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1. Is the owner liable to continue to make payments.
2. Can the owner claim bankruptcy if he is financially ruined due to attorney fees, etc. - and will this alleviate him of his responsibility to pay for the house (which he no longer owns) forever?
Interesting issue. The morgage continues to be a valid contract between the bank and the owner; the mortgage may have a provision permitting acceleration or foreclosure in the event of this type of circumstance. The mere seizure, though, wouldn't invalidate the owner's contractual duty to make mortgage payments.Quote:
Quoting Jennifer Levine
It depends upon the type of bankruptcy and its resolution. Under a Chapter 13 repayment plan the owner may have to pay some percentage of the mortgage debt. Or, more correctly, whatever arrearage may exist after the sale proceeds are applied to the mortgage balance.Quote:
Quoting Jennifer Levine