Can They Take your Personal Belongings if you're Foreclosed On?

One of the questions I've come across most often is "If my home is being foreclosed and the bank takes my home, can they take my car and other belongings, too?"

The short answer is that No, the lender can not take any personal belongings if they take back the home. Because the mortgage loan is secured by the property, the lender only has the right to take the property. And they can only take the house if the correct procedures are followed to foreclose.

However, in many cases, the lender can sue you for the difference between the amount the property sells for at the sheriff sale and the amount that you owed on the mortgage. Because properties rarely sell at auction for more than what was owed, this can result in the lender losing tens of thousands of dollars. In order to recover these vast sums of money, the lender can sue you and obtain a judgment against your personal items and belongings. This is called a "deficiency judgment," and is legal in nearly every state.

If this is the case, then, with enough work on the part of the lender, they can repossess your personal belongings. In any event, having a foreclosure and a deficiency judgment on your credit report will affect your ability to borrow money far into the future. No creditor wants to give money to someone who has defaulted on loan amounts of potentially hundreds of thousands of dollars. A deficiency judgment coupled with a foreclosure can seriously cripple your ability to get a car loan, personal loan, or new home loan.

Therefore, your very first goal should be learning what options you still have to stop the foreclosure and protect not only your house, but all of your belongings and your earnings. Either stop the foreclosure yourself, or obtain assistance to stop foreclosure.

However, be very careful which foreclosure help companies you deal with or trust. Because of the nature of the foreclosure situation and the potential for desperate homeowners, a vast number of criminals and other "sharks" operate in the foreclosure industry. Unfortunately, the help these companies or individuals provide can leave you in a much worse situation than you are in now.

That's why we recommend you do whatever you can to stop the foreclosure yourself by whatever way possible. If you can not or are unwilling to attempt to stop foreclosure on your own, then search for either government programs or other free foreclosure help programs.

So, your lender can not directly take your personal belongings in a foreclosure, but they can sue you outside of the foreclosure for an extra judgment to be placed against you. Hopefully you will be able to stop the foreclosure and keep, not only your car and other items, but, most importantly, your home.