Is my traditional IRA safe from my mortgage company?

Funds contributed to IRAs are exempt "only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires." Code Civ. Proc. ?704.115(e). But let's back up. First, if the mortgage is a purchase money loan, the lender is limited to the remedy of foreclosure and cannot sue for any deficiency (amount by which loan balance exceeds sale price of home). Second, is your loan underwater? (house worth less than principal balance of loan). If not, then there would not be any deficiency after foreclosure for the lender to collect. In fact, the lender would have to refund to you any amount by which the foreclosure sale price exceeds the loan balance plus costs of foreclosure. If you cannot afford the home, try to negotiate with the lender for a "deed in lieu of foreclosure." This means you voluntarily sign a deed giving the home back to the lender. Banks will often pay your moving expenses, or other cash settlement, in exchange for not having to incur the expenses of the foreclosure process.

In Nevada, your IRA and other qualified retirement plans are exempt from execution (meaning safe from creditors) up to $500,000. Other states have different limits.

I would suggest short selling your property. Your IRA is exempt.

It depends on the exemption laws of the state where you live. In Arizona the funds are exempt so long as they are in the IRA. Once you put them in your checking account they are no longer safe. But what you really should be asking is can the lender sue you. Arizona has an anti-deficiency statute. There are some rules about the character of the property. So, check with an attorney licensed in the state where you live.

Usually a mortgage company in California can only take back the property. If the loan is the loan you used to buy the property, and you default, the lender will foreclose or accept a deed in lieu of foreclosure and take title to the property. The lender is prevented from collecting any deficiency by the California anti-deficiency laws. In any collection matter, your retirement account is protected because you can claim an exemption of up to more than $1 million for those accounts.