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do i have to pay what is owed if my home is forclosed and sold at sherriff sale?

I have a good job but because of a lot of bad things happening i ended up in forclosure whith my home in ohio. it is a fannie mae loan on the property and the bank is trying to get me back into the house .. but i have been told that they will not pursue any collections for the balance if it is sold at a sherriffs sale .. my credit is already shot .. and if this is true i am in a much better situation now . i am 56 and living in a small trailer with very small expenses... thank u for ure thoughts.......

Public Comments

1. The bank is trying to get you back into the house because having a tenant in the house will detour vandalism on the otherwise vacant house. It's up to you if you want to do it or not. If the house is finally sold for less than what the loan balances + legal fees, they can file a judgment against you for the deficient balance. Many places don't bother though, because if you lost your house, there really isn't much else they can get from you, and it would cost more in fees than they would actually get back. Can't get blood from a turnip kind of a thing.
2. This all depends on the loan. If you just borrowed money to buy a house, then no, you will only have to pay income tax on the amount you screwed them out of. If you ever refinanced and received any cash from the property your situation is different, you still owe them the money you were given.
3. Most of the time what happens when real estate goes into foreclosure and up for sale at auction you have to make up the difference of what is not paid. Example: if you owe 100,000$ and the house sells for 90,000$ then there is still 10,000$ left on the property to be paid. That amount can be collected in two different ways. 1) The mortgage company will forgive the debt and report it to the IRS. You will then be required to report that debt forgiveness as income on your taxes next year. 2) The mortgage company will keep the debt and you will have to make payments to the mortgage company for that amount. They may opt to sell that debt to a collection agency. Either way it will have a negative effect on your credit report. It is up to the mortgage company what they want to do.
4. It all depends on your state's statutes. Some states absolutely forbid judgments for the balance of purchase money mortgages. Some states allow such judgments in only limited circumstances. Some states that do allow judgments for balances require lenders to pursue judicial foreclosure, that is, to go to court to foreclose the property, as opposed to the traditional default notice/sheriff's sale method. Some states allow lenders to foreclose non-judicially, then later go to court to secure judgment for the remaining balance, if any. Since you did not specify what state the property is located, nobody on this forum can even begin to give you an accurate answer. Edit: Sorry, I did not notice that you were in Ohio. In Ohio, the lender may pursue collection of the unpaid balance. As far as I can tell however, the statute of limitations for collection of a mortgage balance in Ohio is two years from the date of the sheriff's sale.
5. you need to talk with a lawyer. Per Google, Ohio is a recourse state. This means that YES!!! the bank will come after you for the balance and fees. SEE A LAWYER TODAY