Step #8: Deficiency Judgments
Pay very close attention to what I am about to tell you. Not reading this section can cost you thousands of dollars!
Homeowners can still be on the hook for the difference between what they "short-sell" their home for and what is actually owed the bank on the original note through what is called a "deficiency judgment."
Deficiency judgments can be ticking time bombs that come back and blow up in your face years after you've short sold your home and moved on thinking you've been released from all obligations. Imagine getting a phone call from a collection agency one night 3 years down the road and the caller informing you that you owe them $65,000.00?
Just because your bank approved the short sale doesn't necessarily mean you've been released from any deficiency judgments. You must insure you have negotiated and received in writing a release from any and all deficiencies.
Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether or not there's a second mortgage or other liens. Ignoring the possibility of a deficiency judgment is can ruin you. In the case of foreclosures, lenders can pursue deficiency judgments in more than 30 states. Some states, such as California, have non-recourse laws and don't allow deficiency judgments. Be careful however because even in non-recourse states you may be subject to claims if your original purchase loan had ever been refinanced.
Lenders are often willing to release their right to recourse however you must ask! Don't assume. Be certain to insure that your short sale professional is able to secure in writing a release from future claims and/or negotiate an acceptable settlement.
So, knowing what you now know - if you think a real estate short sale makes the most sense for you and you'd like to take the next step in the process, just call 888-478-3902 for a FREE over the phone consultation.
Put us to work for you for FREE today…
We'll get to work creating a strong, accurate and thorough B.P.O. (broker price opinion) that will give us your homes 30-day sales price, a bullet-proof marketing plan and begin working with you to construct the perfect short sale package.
Perhaps you think your short sale would never get approved because you show too much income?
Maybe your situation isn't yet desperate but could be in the future. Can you still get a short-offer approved?
Whatever your situation, if you owe more than your property is worth and would like to sell it through a real estate short sale do this:
Call 888-478-3902 and stay on the line after the brief recording to connect with me or a member of my team for a free consultation or email me at joe@joehoms.com
I wish you the very best of success with your real estate future and hope to be able to serve you in the process!
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