• Lender rights vary from state to state.bank image by Pefkos from Fotolia.com
  
  Following a foreclosure, a lending institution will sell the property that has been foreclosed on to pay part or all of the debt owed against it. If your foreclosed property sells for less than the amount you still owe on the mortgage, lenders in your state may be able to sue you for the difference after the sale. Some states legislate protections that prohibit lenders from suing to collect more than the selling price of a property. These are called "nonrecourse" states.
  
  

Nonrecourse States

• Thirteen states protect debtors to one degree or another from being sued for the balance of a mortgage with anti-deficiency statutes. These states are Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Oregon, Texas, Utah and Washington.
  
  

One Action States

• Many states make their statutes available online through their government site.The gold topped state capitol building in Montpelier, Vermont image by Rob Hill from Fotolia.com
  
  One way that states allow lenders some leeway in recovering losses while protecting debt consumers from burdensome liability is by limiting the number of legal actions banks and credit unions can take against a foreclosed mortgage holder. As an example, a bank may be allowed only one legal action regarding a foreclosed property. Laws vary by state. These states include California, Idaho, Montana, Nevada, New York and Utah.
  
  

Recourse States

• Thirty-seven states and the District of Columbia and Puerto Rico allow recourse for lenders. These include Alabama, Arkansas, Colorado, Delaware, Georgia, Hawaii, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Mississippi, Missouri, North Carolina, Ohio, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin and Wyoming.
  
  

Liability

• Use only reliable, recommended sources to help you solve your mortgage puzzle.home puzzle image by Hao Wang from Fotolia.com
  
  Borrowers facing foreclosure or short sale need to check with local professionals qualified to advise them on state foreclosure and tax law. Legislation changes and IRS and state tax rules can complicate the decision-making process. An unpaid mortgage balance, even in a nonrecourse state, can sometimes qualify as debt forgiveness and be open to taxation.
  
  Before foreclosure is imminent, talk to a recommended Realtor, attorney or your lender representative about what choices might best fit your situation. Be sure to prioritize protecting yourself against future lawsuits. Negotiations with a lender can often include this protection. Insist that all agreements be written before you proceed with any actions. Avoid debt consolidation companies and other debt service businesses that promise easy answers to foreclosure and debt problems.