Foreclosure

questions & answers

Question: I own 2 properties, if I let one go into foreclosure and reside in the other property can the bank readjust my mortgage that is not in foreclosure?

Answer: Most likely no, however it depends on the language of the promissory notes that make up your mortgage. Some credit cards and other revolving lines of credit have what are called universal default provisions. So if you default on another debt, that credit card company is permitted to increase your interest rate, lower your credit limit and potentially cancel your account. I am unaware of any residential mortgages that contain universal default provisions, but it is possible and so you should review the promissory notes. In regard to letting one of your houses go into foreclosure, you may want to look into other alternatives or consult with an attorney because there may be possible tax-related results to your decision. See the Avoiding Foreclosure of Your Home article on AZLawHelp.org. Best of luck.