The Washington Post reported today in a copyrighted story that lenders on a national level are beginning to pursue people for the money that is owed after a foreclosure occurs. In my experience, that is not real common here in Texas, but it wouldn't surprise me if it begins to increase.
Particularly where there are second mortgages, or so-called "80-20" financing. Like you don't have enough to worry about, if you are losing your house, to have the lender or a collection agency coming after you trying to collect. They could file a lawsuit against you for the rest of the money, the money that they did not recover from the foreclosure process.
If they got a judgment, they could seize your non-exempt assets such as bank accounts, investments or possibly other property. But one cause of the lenders beginning to pursue people, is the "strategic" foreclosures, where people are letting their houses go back, even though they could afford them if they want to do so. Not so much here in Houston, but in other areas of the country, home prices have fallen precipitously in the past few years.
And if you owe $50,000 or $100,000 more on your house than it is worth, it is understandable that some people would choose to just "walk away" from the house, rather than struggle to continue to pay it. Particularly so if they have an adjustable rate mortgage or ARM, and their payments are high.
That would be another reason for some people to just give up and walk away. If you are considering walking away from your home, and letting the bank or mortgage company have it, you should consult with an attorney experienced in these matter such as myself. It could be that your lender will try to pursue you for the debt. If so, filing bankruptcy is one option to eliminate any chance that they can collect a foreclosure deficiency from you. There may be other options in your situation. To call my office for an appointment, call 713-772-8037. Free first visits are available for residents of the Houston Texas metropolitan area and surrounding counties.