Thousands of Maryland families have lost their homes to foreclosure or short sales, but many don’t know that third-party debt collectors can still come after them for money they may not have known they owed.
In 2005, Miranda Cisneros Bell and her husband, Ed Bell, bought a house in Emmitsburg for $535,000. They still had the house they are living in currently in Frederick County.
“We could not sell this house. We were stuck between two mortgages,” Cisneros Bell said.
They were forced to let the Emmitsburg house go into foreclosure in 2009. Thinking that the case was over, they moved on with their lives, but then a third-party debt collector out of Texas started calling.
“The debt collector was saying I owed $51,000,” Cisneros Bell said.
“It’s like jumping out of the bushes. You’ve got a person who has moved on with their lives, and they’re walking down the street and someone jumps out of the bushes and says, ‘Got you,'” said Avy Mallik, an attorney with the group Civil Justice.
He said many people don’t realize after a foreclosure sale that they can still be on the hook for the deficiency.
“The deficiency is the difference between what the home sold for at a foreclosure sale and what they owed the bank — what their balance was when the sale occurred,” Mallik said.
For example, if a person borrowed $200,000 from the bank and their house sold at foreclosure for $100,000, the bank could come after them for the $100,000 difference.