[rochajam]

I bought a house Five years ago. I have been trying to fix it up, but have gotten to a point were I just can't affourd it anymore? I have no money left, My credit has maxed out. I have already re-financed and used all the equity. I think Im just going to walk away from the house. My question is- I own a second home If I let this one go into foreclosure, will they take my second home from me?

[tickle]

Do you live in the US or Canada ?

[Dr D]

Assuming that you live in the US and that mortgage note is secured by a Deed of Trust, and the house goes through a Trustee Sale, you will owe the lender nothing even if it sells for less than is owed. That lender could choose to proceed with a Judicial Foreclosure, but the chance of that is slim. If the note is secured by a Realty Mortgage, then the lender must go through a Judicial Foreclosure, which most likely has provision for a defficiency balance from you. If you have both a first and second motrgage, and the home is woefully over encumbered; the second lienholder could choose not to go after the property, and allow the first to do the Trustee Sale. Then the second would sue you on the basis of the note, get a judgment against you, and try to collect. I hope you realize that this will trash your credit for some time. Good luck.

[Fr_Chuck]

Not sure but it is common here and in many foreclosures I have seen for the lender to go after the perosn for the remainder of the loan not paid off in the foreclosure, I have seen this force many into bankruptcy.

[ronmauldin]

Assuming you live in the USA, there are at least fifty different answers, see: Loss Mitigation Services Locator
If you lived in Texas, as do I, and lived in your second home, it could not be taken away because of homestead exemptions. However, the lender could file a judgement that would need to be paid prior to the eventual sale of your property.

In many cases, there are other options instead of foreclosure. You might consider loss mitigation - Stop Your Foreclosure at PreForeclosure USA

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This is my opinion and not legal advice.

[Dr D]

Since the original poster has not provided additional information, we are all pretty much wasting our time discussing the what ifs. Out of curiosity I did a Google search, and found that only 9 states are Deed of Trust states; 26 are mortgage states, and 15 states use both. I was amazed that more states had not gone to exclusive use of D of T. In my opinion, the Realty Mortgage is a relic of the past, which is a pain for the borrower and the lender. For those interested, read up on the Deed of Trust, and ask your legislature to adopt that instrument.