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Your question, ‘Can a mortgage company garnish wages?’ must be answered differently depending on the specific factors involved in your situation. As a rule when you take a mortgage out on a home, then the home stands as collateral for the loan. Sometimes you will have private mortgage insurance (PMI) that pays off the note when you default and the home goes to foreclosure. Not all states exempt the borrower from further action by the lender after foreclosure. Many states say that once the house is foreclosed the lender cannot take further action against the home owner who defaulted.

If you live in a state that allows a mortgage company to garnish wages then the lender will be restricted to what can be included in the petition to the court to withhold earnings. When you have not stayed current on your loan the lender can eventually take possession of the home and sell the home to collect the money for the balance due on the home loan. The homes are sold at public auctions and the lender must pay fees associated with the sale. Sometimes the home will not sell for as much as is left on the remainder of the note. The lender will have to pay the auctioneer for his services.

If you live in Connecticut or Florida and you have had your home go through foreclosure, then you will not be liable for any thing associated with that sale. If you live in Alabama or Arkansas and your house has gone through foreclosure then you will have to pay more money to the lender. You will be obligated to pay the balance of the note that remains unpaid after the sale of the home. You will be liable for the fees that the lender incurred in the sale of the home. If you do not pay the lender then the mortgage company can garnish wages from your earnings. When the lender has to go to court to get the wage withholding approved by the judge, there will be fees associated with this petition to the court. You will have to pay these fees in addition to the other charges that the lender incurred.

The lender must allow the former owner of the foreclosed property time to make the repayment that is due. If the borrower does not make any attempt to make the payments or makes the payments late on a consistent basis, the lender can ask the court for the earnings withholding. You will find that your question, ‘Can a mortgage company garnish wages?’ is yes if you live in an area that the laws allow them to do so.