[tricejones]

If we "walk away" from a house in foreclosure can other real estate property be taken away too? Also,what are the negative credit affects?

[DaveyJones]

Before I type anything... consult a real estate attorney that knows your own States laws.

Now, generally speaking, a foreclosure is going to have a negative impact on your credit rating for a few years, but all is not lost. Can someone seize other property if one house is foreclosed upon... usually NO. Each lender has certain legal rights to the property in which the lien is on. Your lender may be foreclosing on your home since the payments fell behind... it happens. If there is another property that you own and there is a lien on that one, I have NEVER heard of lender "A" taking away another property that lender "B" has legal rights to if the same thing were to happen with that property. Now, I have been in mortgage banking for almost 14 years and I will use "generally" quite a bit here since I do not know your local laws... but I can say with almost 99% certainty that what am telling you is pretty solid... as legally as I can even say that.

Foreclosure is a legal proceeding that every property owner has the right to excersize, but it is property specific. Now if someone were to sue you for whatever reason, they could go after all of your assets and that would include all of the things you own. This is not the case. You fell behind and now they want that property and only that property back so they cann sell it and recoup some of their loss. Pretty simple.

From a credit perspective, Fannie Mae and Freddie Mac have a 24 month rule that says they won't even entertain "looking" at a potential homebuyer if they have a foreclosure on their credit report. Some SubPrime lenders will do things as little as 6-12 months after a foreclosure, but would require a downpayment of 5-20%... dependant upon your credit score. You can rebuild or maintain what accounts you do have, or look into Chapter 7 or 13 BK's as they can be a solution that may help out.

Also, do not just "walk away" from the house. Depending upon where you live, you have certain legal rights to the house even though they may have started foreclosure. It is called a "redemption period". Where I am at in Michigan, the redemption period is either 6 or 12 months, depending on the size of the lot actually. More than 3 acres gets you a 12 month period in which you can try to save/refinance the property. The main thing is that if you stay in the house during this period, you live RENT FREE! Use this time to save money. Some lenders will even do something called "cash for keys"... ever hear of a house that someone took all of the cabinets out of and anything of value... a mad foreclosure person that took anything that was not built as part of the house... cost a lender LOTS of money and they would like to avoid that at all costs. Talk to the realtor that is in charge of the property for the bank and see what they can do. Even though you owe them money, they will pay thousands literally to get you out now. You either live their on their dime the entire redemption period or they pay you to leave. Be smart about the choices you make as they can literally cost you thousands more than you already stand to lose in the equity you are about to forfeit. Hope this helps.