titleist1 wrote:While I admire the guy that bulldozed his house in a warped kind of way, he better hope that the bank can't come after him for the difference between what he owes and what they are able to get for the lot.
I was surprised to find out that in many states banks are able to come after the people they foreclosed on for the difference when they "short sale" the house. Hopefully for him Ohio isn't one of those states or he may get a bill for $50k or whatever amount down the road.
Why is everyone I know surprised by this?
If you wreck your car and the insurance doesn't cover the balance of the loan, you still owe the bank the difference(unless you have gap insurance).
Mortgages are merely formal collateralized notes. They pre-date UCC filings which are more or less the same thing. The note is filed with the county in the case of the mortgage while a UCC filing is with the state.
You owe the balance on the note, no matter the condition, or existence, of the collateral. The collateral is merely "insurance" by pledging the property to the lender first in the case of a default. The only way to remove your liability is to go bankrupt.
Makes one wonder why the bankruptcy laws were "refined" a few years ago.