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I am facing forclosure on a 250k mortgage. Do I have to pay back 50k if house sale nets only 200k?

Bank says if they forclose I have to pay them back the difference between sale price and mortgage amount. I'm being told this is false. What are the rules in Illinois?

Public Comments

1. The bank will always go after you since you owe them money. AND NO, all states allow this. It is call a Deficiency Judgement. You borrowed a sum of money and you didn't pay it back. The back got some of the money back when they got the house, but YOU STILL OWE THE balance, plus costs (lawyer, etc). This is the reason most people that have been foreclosed then have to file for BK. If the bank didn't go after the borrower for the balance, what would stop borrowers from just mailing the keys to the bank? AND NO. The new proposed tax changes say that this write off that the bank has taken is not taxable. In the past, you would have owed the bank the remaining balance and if you didn't pay it, you would have owed income tax on it because the IRS said it was income UPDATE: to those people that say you are due a refund if the bank sells the house for more then you owe. WRONG. After the bank gets the property back. It is theres. If they get the house back for less then you owe, YOU OWE THE BANK THE DIFFERENCE PLUS FEES. When they go to sell the property and make more then you owe. THEY KEEP THE MONEY. It's their house at that point.
2. actually, this is another question. say if the house goes for $300K, would the foreclosing party collect the $50K surplus or would that go to the bank, as well?
3. Any surplus must be returned back to the homeowner. That prevents a bank from accelerating foreclosure on a home just because it has a ton of equity....which many moons ago (like 30 years) that used to happen alot.
4. if foreclosed on. the price it sells for - less = u owe money to bank and they will chase u. - more (highly unlikely) = some money in Ur pockets after expenses fee legal. as for 'tax bill' the propose tax bill is not law. there will be tax due on any money 'forgiven' by the loan. suggest u consult lawyer about 'deed in lue of foreclosure WITHOUT RECOURSE' this allows u to 'give' back the property without them having a way to chase u for their loses. visit dave ramsey.com to learn ur hard lseeons from others bigger mistakes. it is cheaper easier faster.
5. why would th ehouse be worth less than the mortgage ? try and spruce it up