I am discharged of the debt after the foreclosure?

Well, not always my friend….once the first mortgage holder forecloses and gets the property back at auction, sometimes, the will make they money back and will not always come after you for what you owe, but as previously discussed, the lender has the right to 1099 you for what they lost, therefore making you liable for the tax balance.

On the other hand, the second mortgage holder is a lot more likely to come after you as they almost always get wiped out and lose the whole amount. So it is very likely they will sue you anyway after the foreclosure to get there money back, and they may obtain a judgment against you!

In some case, you will have no other choice but to file bankruptcy protection in order to get rid of those judgments, something you will have to consult with your bankruptcy attorney about.