# Yet another question, U.S. mortgages **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [January 13, 2009, 2:35pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093 "2009-01-13T14:35:51Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![Canadiangirl](https://avatars.discourse-cdn.com/v4/letter/c/dc4da7/32.png) [@Canadiangirl](https://boards.straightdope.com/u/Canadiangirl)\ **Post date:** [January 13, 2009, 2:35pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/1 "2009-01-13T14:35:51Z")
I was speaking to someone yesterday about people walking away from properties in Florida (he knows someone who has a condo where several owners have done this). As one of the things we were discussing, he was saying that, in the U.S. (or perhaps just Florida, I’m not sure), it’s the property that is mortgaged, not the person. So, theoretically, a person could walk away from one home and mortgage; go and buy another and have little affect on them personally. That’s why people are just walking away from some properties. The mortgage would stay with the property. That doesn’t seem to make any sense. Or perhaps I just don’t understand it? Here, the money you owe would follow you anywhere, whether or not you actually lived in the property. ---
**Author:** ![NicePete](https://avatars.discourse-cdn.com/v4/letter/n/ee7513/32.png) [@NicePete](https://boards.straightdope.com/u/NicePete)\ **Post date:** [January 13, 2009, 2:52pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/2 "2009-01-13T14:52:16Z")
A “mortgage” is a security interest in a piece of real property which lets the creditor take the property if the debtor defaults on the loan. The loan is still an underlying contractual obligation of the debtor. So, if the debtor walked away from the property and quit paying on the loan, the creditor could have the property sold at the courthouse steps. If the property doesn’t bring more than the debtor owes the creditor, then the debtor still owes the creditor the difference. ---
**Author:** ![Annie-Xmas](https://avatars.discourse-cdn.com/v4/letter/a/ecc23a/32.png) [@Annie-Xmas](https://boards.straightdope.com/u/Annie-Xmas)\ **Post date:** [January 13, 2009, 2:52pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/3 "2009-01-13T14:52:37Z")
I’ve worked in real estate for 25 years, and I have only one word for you: BULLSHIT. The person borrowing the money is responsible for the mortgage. If they sell the property, the loan has to be paid off. ---
**Author:** ![Furious\_Marmot](https://avatars.discourse-cdn.com/v4/letter/f/dfb087/32.png) [@Furious\_Marmot](https://boards.straightdope.com/u/Furious_Marmot)\ **Post date:** [January 13, 2009, 2:54pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/4 "2009-01-13T14:54:23Z")
I am not a banker, but if someone stops paying on a mortgage, how are they going to convince a bank to lend them money again immediately after the fact? ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [January 13, 2009, 3:06pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/5 "2009-01-13T15:06:10Z")
> [@NicePete](#): > > A “mortgage” is a security interest in a piece of real property which lets the creditor take the property if the debtor defaults on the loan. > > The loan is still an underlying contractual obligation of the debtor. So, if the debtor walked away from the property and quit paying on the loan, the creditor could have the property sold at the courthouse steps. If the property doesn’t bring more than the debtor owes the creditor, then the debtor still owes the creditor the difference. I gather that varies by state - some states do not allow the creditor to go after the debtor in that situation, others do. In general though, the creditor _could_ go after you for the balance, but in practice they may not do so all that often. The debtor could _not_ just go and buy another property: the foreclosure is a huge ding on his credit rating, and they’d have a very hard time convincing another bank to lend them money to purchase the new property. What I’ve heard of is the person purchases another property _before_ walking away from the first one and blowing their credit rating. ---
**Author:** ![NicePete](https://avatars.discourse-cdn.com/v4/letter/n/ee7513/32.png) [@NicePete](https://boards.straightdope.com/u/NicePete)\ **Post date:** [January 13, 2009, 3:43pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/6 "2009-01-13T15:43:06Z")
> [@Mama\_Zappa](#): > > I gather that varies by state - some states do not allow the creditor to go after the debtor in that situation, others do. Good point. Deficiency judgments are allowed in my state – perhaps not in Florida. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [January 13, 2009, 7:58pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/7 "2009-01-13T19:58:41Z")
I think the Floridian from the OP has the meaning of the term “walking away from a mortgage” confused. People call it that, but you don’t just walk away from it. You do what everyone else here has said. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [January 13, 2009, 8:06pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/8 "2009-01-13T20:06:14Z")
> [@NicePete](#): > > Good point. Deficiency judgments are allowed in my state – perhaps not in Florida. They are available: > [@](#): > > If the foreclosure sale does not pay the debt entirely, the lender can request that the court enter a judgment for the shortage period. This is known as a deficiency judgment. Deficiency judgments are discretionary with the court, based upon principles of equity. The deficiency judgment is not based solely on the proceeds of judicial sale. The lender must show that the market value of the property was less than the amount of the foreclosure judgment and the deficiency judgment is entered for the difference. Proof of market value requires testimony of an expert, such as an appraiser. [http://www.naplesnews.com/news/2006/Oct/18/its\_law\_bank\_doesnt\_take\_back\_property\_mortgage\_fo/](http://www.naplesnews.com/news/2006/Oct/18/its_law_bank_doesnt_take_back_property_mortgage_fo/) Here is a chart that shows the foreclosure laws of every state: [http://www.all-foreclosure.com/procedures.htm](http://www.all-foreclosure.com/procedures.htm) ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [January 13, 2009, 8:25pm UTC](https://boards.straightdope.com/t/yet-another-question-u-s-mortgages/481093/9 "2009-01-13T20:25:54Z")
> [@Canadiangirl](#): > > As one of the things we were discussing, he was saying that, in the U.S. (or perhaps just Florida, I’m not sure), it’s the property that is mortgaged, not the person. So, theoretically, a person could walk away from one home and mortgage; go and buy another and have little affect on them personally. That’s why people are just walking away from some properties. The mortgage would stay with the property. **MamaZappa** is correct. In many states, including big ones like California, all residential mortgages are what is called “non-recourse,” which means that the lender does not have recourse to any of the borrower’s other assets. If the lender forecloses and price it obtains for the property is less than the outstanding debt, the lender takes a loss; it cannot bring suit against the debtor for the deficiency. Other states, such as New York, require the lender to choose between foreclosing on the property or suing the buyer for the default; if the lender opts to foreclose, it cannot then pursue a deficiency judgment. And **Furious\_Marmot** is also correct. If a buyer walks away from a non-recourse mortgage and leaves a deficiency behind, that will seriously damage the buyer’s credit rating..