We own a rental property that is going to forclosure. What affect will that have on our primary residence and what are our legal responsibilities? Do they just take the property and walk away?
1 Answer from Attorneys
What effect it will have on your primary residence will depend on what your mortgage for your primary residence says.
In a real estate foreclosure. The property is taken by the mortgage holder and sold. If the sale nets more than what you owe you get money. If not you be virtue of the promissory note you sign still have to make up the difference.
Also the amount the property sold for will count as income. Assuming it sold for more than you paid for the property. It may also have to be sold at a loss. In any case there are tax consequences to a foreclosure.
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