QUESTION
How do I avoid a deficiency judgement after I short sell my house?
Asked on Feb 06th, 2013 on Real Estate - Florida
More details to this question:
In 2011, I was diagnosed with cancer. Treatments are expensive and the bills rolled over into 2012. Also, in March of 2012, my partner, the other person on my mortgage, lost her job of 20 years. She was the primary breadwinner. She has found work, but is making only about 70% of what she did before. We can no longer afford our mortgage. Our loan servicer has accepted our application and hardship letter for short sale but won't give us a statement or any documentation saying what we owe or that they won't pursue a judgement after the home is sold.
1 ANSWER
Asset Protection Attorney serving Vero Beach, FL
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Charles H. Sanford Law Offices P.L.
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I need more information. However, I make the following comments and observations:
Lenders don't even consider short sales unless you've got a signed contract. So, I assume you have signed contract*. If you've got a contract then you submit it to Lender for short sale approval application along with copy of the contract , hardship letter, financial statements, tax returns etc. Note: title companies sometimes can handle the short sale paperwork, however they are not permitted by law to negotiate short sale approvals.
There really is little reason to close on short sale unless you can get some waiver or reduction in deficiency.
*Important, any sales contract with buyer should have a short sales rider which specifically makes the contract conditional upon receiving lender's Short Sale approval and which approval specifically waives Lender's right to pursue deficiency. Hopefully, your contract has this special rider, otherwise you could have a problem.
Finally, you should seek legal counsel.
Answered on Feb 07th, 2013 at 11:17 AM