Can lenders collect on a mortgage deficiency judgement in South Carolina if I refuse to pay?

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I am moving to South Carolina for work, but my mortgage company might stick me with a deficiency judgement from my current home in Michigan with an 80/20 mortgage. From what I have found, South Carolina prohibits wage garnishment from lenders except for things like child support and student loans.

I’ve asked this question before about campers, trailers, permanent sites at a camping ground in South Carolina.

I am doing alot of research here and many of my feedbacks have been negative about any bank or financial institute even considering a 2nd mortgage or loan to purchase one of these so called trailers in a campground.

I also am getting negative feedbacks on the resale value on these structures.

Anyone know, or how to go about looking for a reputable lender in South Carolina? I am in North Carolina and my broker does not know anyone nor does he have any advice for me on this situation. He told me to check in South Carolina.

So, here I am asking you.

Any help will be greatly appreciated.

5 Comments
  1. Reply
    Bert
    January 27, 2011 at 5:54 pm

    They just send you a 1099 for the deficiency and then the IRS will want income taxes on the amount

  2. Reply
    kemperk
    January 27, 2011 at 6:28 pm

    pay the mortgage, even if in bits and pieces. IN 4-9 yrs, the house value will go up
    50+%.

    if the house goes to sale, in 95% of all cases, the 2nd note holder has to buy out the
    first position or the 2nd disappears.

  3. Reply
    loanmasterone
    January 27, 2011 at 6:50 pm

    Why are you concerned with South Carolina law? The foreclosure laws of Michigan will prevail, because the house being foreclosed on is located in Michigan.

    If the lender prevail in obtaining a deficiency judgment in Michigan, this obligation would follow you no matter where you decide to live in the future.

    If you make a debt in California with Sears or incur a court ordered payment and move to Michigan that move does not negate any debts you owe because you decided to move.

    Michigan allows both judicial and non-judicial forecloses as most states. Your loan docs you signed at the closing of your mortgage purchase transaction would indicate the type foreclosure procedure used against you.

    Normally is your lender use the judicial foreclosure procedure then the lender could legally proceed against you for a deficiency judgment which is allowed Michigan. If the lender decides to do this they must take this to the court in Michigan. If the lender prevail then you would be required to make up the difference between what the property sold for and you loan balance. Even though Michigan legally allow lenders to come after you for a deficiency judgment it is doubtful they would do this.

    If the non-judicial foreclosure procedure is used then normally the lender would not seek a deficiency judgment. They would simply take the loss. Now since there is a loss it is deemed that someone had a gain of some sort. This person that has been deemed to have this gain is you the former home owner. Therefore the lender will issue a 1099 indicating this gain amount. Based on this gain you would be required to file and pay the IRS the appropriate income tax if any.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  4. Reply
    Landlord
    January 27, 2011 at 7:37 pm

    SC may be able to prevent a garnishment, but they will not interfere with tax seizures, account seizures and liens on property.

    Leaving the state does not entitle you to keep the banks money.

  5. Reply
    Tally
    January 27, 2011 at 8:05 pm

    Yes, most of your feedbacks will be negative about banks and financial institutions considering a loan for a trailer, because of the huge risk factor.

    You might be able to take out a second mortgage on your current home for the purchase of the trailer. That is a possibility depending on the equity in your current home.

    As far as looking for a reputable lending in SC, I would contact the campground where this trailer is and ask them in the office who the lenders are for the majority of trailer owners. Chances are that you will find they have a particular lender or lenders that owners of trailer in that campground use.

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