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Short Sale - Liable for deficiency? |
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Are you liable for the Loan deficiency after the Short Sale?
The large majority of information on the net states something to the effect that a short sale is better for your credit and erases any liability you may have for the loan.
Many real estate professionals are under the mistaken belief that a short sale automatically relieves a seller of the deficiency for the loan.
Some lenders have the sellers sign paperwork at the close which establishes liability which might not have existed had the bank foreclosed. Other banks provide information to the closing agent saying they will not seek liability if certain conditions are met. Others provide vague releases. Some lenders clearly state state they are releasing the lien but not the note.
Surprisingly at least one of the national short sale networks advise their sellers to go through with the short sale anyway?
Why? The lender gets to sell the property, the buyer gets a great deal, the Realtors get paid and the seller loses her house and still has to pay off the loan.
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Last Updated ( Monday, 31 December 2007 )
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