Deficiency Judgments in North Carolina

[Joel Fraser]

Hello all, I am new to this forum, and I am very glad that I found it. Here is my situation, and I was wondering if there was someone out there with some expertise that could help me. My wife and myself purchased a rental house in North Carolina 2 years ago on which we were basically and horribly scammed. We were introduced to someone that supposedly was going to show us how to invest in real estate. We foolishly entered into a verbal agreement with a guy that was supposed to split any costs and profits on the house, and get tenants in the house that would buy the property in a maximum of one year time frame. Well, to make a long story short, this guy walked away, and left us with a huge negative cash flow. I just lost my job, and we are in financial trouble. The house is in foreclosure currently, and I am trying to work out a deed in lieu with the bank. The house is worth about 30K less than what is owed on it. We were completely and totally taken for a ride. We have been worried about the possibility of the bank trying to obtain a deficiency judgment against us. I have read conflicting things about deficiency judgments in North Carolina. There is a state statute that forbids a bank from coming after someone if the loans were used for purchase of the real estate, (purchase money), but I have a friend that is an attorney in Florida, and he says that that only applies to owner financed property, like when the owner takes back a private mortgage. Is there anyone at all out there that can answer this for us? We would be most grateful.