A few years ago, you bought a terribly overpriced home. To you $375,000 or more for that Spanish-style with a pool seemed totally reasonable at the time (won't blame you, so many others did too!!!).
Now, fast forward a couple/few years, the economy tanked, your positive cash flow probably started to become negative, and then, you realized, “Darn this house is flipping expensive, I can barely keep up.” Until you could really no longer keep up and, bye bye went the house.
You walked away, let the house go into foreclosure, and thought you were wiping your hands clean. I don't need to spell the details out for you, since you probably took a front seat on that ride....
Your bank took back your house, and you thought that's enough, the money left unpaid has been forgiven, (I mean, after everything you just went through? Right?) clean slate, fresh start for you... Well now, that's just a big fat misunderstanding on your part. There is no way that banks will let this one slide. No, they want what they bargained for, which is the $375,000 you signed that dang mortgage for.
How is the lender going to get back the $150,000 (could be more, could be less) that the foreclosure sale couldn't pay off?
They are going to take you to court for it, lawsuit style!