The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
Three things must happen before the bank is foreclosing may seek to execute, or collect, on assets other than the house. First, there must be a "deficiency" under the foreclosure sale. A deficiency arises when the foreclosure sales price of the home is less than the amount you owe under the mortgage, plus attorneys fees and costs of foreclosure. Second, the bank must obtain a judgment against you for the deficiency. Third, in order to execute on the judgment in another jurisdiction, that jurisdiction's laws must recognize the judgment as enforceable. The enforceability of judgments abroad can be a complex issue involving the application of the foreign country's laws and conflicts of laws principles. If you do not intend to retain the home, approach the lender and offer a "deed-in-lieu" in exchange for waiver of any deficiency. Under this arrangement, you deed the home to the lender, and they agree not to pursue you for a deficiency.
Answer Applies to: Colorado