Negotiating Deficiency is Key in a Short Sale

LreyChased

LoanSafe Member
#81
I think what you're referring to is lender foreclosing on a house while at the same time working on modification or short sale. OP has actually completed Short Sale so there was no problem with lender foreclosing in this case while working on a Short sale.
Not clear on this as it seems contradictory. I'm pretty sure Waters is speaking of dual track nature of foreclosure process in general and seeking to have one contact etc.

My thinking is that OP may have other problems on loan that lawyer can help figure out and possibly pursue even if sale has been done.
 

kidsandliz

LoanSafe Member
#82
It sounds to me like I ought to get several legal opinions, provided I can locate other attorneys who specialize in short sales, etc. I was referred to this one from a real estate agent who advertised on the web he was a short sale specialist in Idaho and had various certificates and had done this for 12 years. I guess I'll call a few more agents with similar credentials and see who they recommend.

Thanks everyone for the comments. Hopefully someone will read this who has been in my fix and managed to extract themselves from it in a state that behaves like my old state.

My agent did say he thought he had some e-mails pertaining to what we thought was supposed to happen (eg be done done, owe no more money after the sale) that he would forwards me. That might give me a leg to stand on with the Amtrust knee cap breaker collections person. Hopefully he will have time to look for that stuff today.
 

sarasmile

LoanSafe Member
#83
Don't know if this will help anyone or not, but while going through my short sale of primary residence (1st mortgage only last June, I stipulated that I reserved the right to refuse any offer that IndyMac accepted in which they would be pursuing a deficiency.
I'm in Fl, had the condo listed with a realtor experienced in short sales (very important), and was told to send my written stipulation in at the time the offer was submitted. Don't know if this is what did it, but the deficiency was all forgiven. It is imperative that the stipulation be submitted with any offer BEFORE you accept it.
 

sarasmile

LoanSafe Member
#84
Don't know if this will help anyone or not, but while going through my short sale of primary residence (1st mortgage only last June, I stipulated that I reserved the right to refuse any offer that IndyMac accepted in which they would be pursuing a deficiency.
I'm in Fl, had the condo listed with a realtor experienced in short sales (very important), and was told to send my written stipulation in at the time the offer was submitted. Don't know if this is what did it, but the deficiency was all forgiven. It is imperative that the stipulation be submitted with any offer BEFORE you accept it.
 

sarasmile

LoanSafe Member
#85
Also, if i remember right, I asked for written assurance at closing that there would be no deficiency. Although they reserved the right to go for deficiency later in their letter (while at the same time saying they wouldn't), I got the forgiveness of debt for taxes last year. There's no way to know for certain until the end of the year you sell, but these things may help some who are having problems getting their lender to work with them.
 

kidsandliz

LoanSafe Member
#86
I have found an experienced real estate attorney and he said since the foreclosure auction was scheduled for the next day that he had been successful arguing in the past that the foreclosure rules should apply. If I had been foreclosed on they would have had to file by last week to come after me. I know one has not as I got a bill from them, don't know about the other yet. I need to get it together to send him all the paperwork.

My other problem is that I didn't see the final letter from the one more aggressive lender until AFTER the sale. It was sent to the agent but not to me. He didn't tell me about it and it clearly states that agreeing to the sale does not forgive the deficiency. Had I known this I would have let it go into foreclosure. I had chemo the week (I have cancer that has no cure) of the sale and was struggling to being with that week. Juggling 8 hours in chemo day one and 4 hours day two and the short sale the next day was hard.
 

kidsandliz

LoanSafe Member
#87
Saramile

I think I am just going to have to wait and see what happens at the end of the year as far as a forgiveness debt. I did tell the more aggressive lender that I'd just turn around and declare bankruptcy if they came after me so maybe that will hold them off. Meanwhile my credit gets trashed more and more each month.
 

MCE JAGGER

LoanSafe Member
#88
That is awesome you included the stipulation. I wish I did that. I am in the middle of a short sale of a FL investment condo that has been accepted by Chase (1st lien holder), however I noticed in their acceptance letter that they included the statement "Please note this amount is for the release of lien only and you are responsible for all deficiency balances per the terms of the original loan documents". When I called Chase to expand on this the representative mentioned that "it is very unlikely" they will pursue collection within five years. I am strongly considering making a cash contribution (5k is all I can give) to waive any deficiency and request a newly worded acceptance letter. The other option is to roll the dice and see if they collect, and if so see if the 5k will settle it then.
 

kidsandliz

LoanSafe Member
#89
That is awesome you included the stipulation. I wish I did that. I am in the middle of a short sale of a FL investment condo that has been accepted by Chase (1st lien holder), however I noticed in their acceptance letter that they included the statement "Please note this amount is for the release of lien only and you are responsible for all deficiency balances per the terms of the original loan documents". When I called Chase to expand on this the representative mentioned that "it is very unlikely" they will pursue collection within five years. I am strongly considering making a cash contribution (5k is all I can give) to waive any deficiency and request a newly worded acceptance letter. The other option is to roll the dice and see if they collect, and if so see if the 5k will settle it then.
Well Chase is still after me. I get a monthly statement with penalties added... After the sale they WILL NOT return phone calls and NO ONE in ANY department has a clue what is going on. The person dealing with the short sale is out of the picture once the sale is done and yet ALL other departments tell me that that person is the person I need to talk with.
 

sarasmile

LoanSafe Member
#91
My note in the sales contract was actually added as an addendum...because it wasn't thought of at the time of the offer. I called a local attorney who said I should amend it with the "forgive deficiency" clause. The buyers were willing to come in and initial the changes. So even if you're involved now in a transaction you may be able to amend it?

I certainly hope things start to look up for you Liz.
 

kidsandliz

LoanSafe Member
#92
My note in the sales contract was actually added as an addendum...because it wasn't thought of at the time of the offer. I called a local attorney who said I should amend it with the "forgive deficiency" clause. The buyers were willing to come in and initial the changes. So even if you're involved now in a transaction you may be able to amend it?

I certainly hope things start to look up for you Liz.
Sale is done - this January. So I am up a creek basically, although if they come after me I am going after the agent.

Liz
 

hsbc-wall

LoanSafe Member
#93
How do I find "an Attorney or Real Estate Agent who is familiar with Short Sale negotiation and has significant experience working with lenders"?
 
#94
Most lenders themselves have experienced agents that they can recommend in your area that are in their network and know what the lender is looking for upfront. If you have not already done so, you would need to begin the process with the lender and at that time you can ask the question.
 

LreyChased

LoanSafe Member
#95
I did not accept new short sale offer as total deficiency didn't add up. Consulted with researchers and auditor and put together strong QWR letter. Found MERS issues and chain of title problem and documented predatory lending. Chase has only answered with requests for more time to do research. About 5 times since April.
 

msugirl

LoanSafe Member
#96
I have an offer on my home in Michigan. It was listed at 60K and the offer is 55K. From talking with Fifth Third, it appears that the first mortgage with Freddie the deficiency will be waived. Numbers are below. However, the second mortgage is where my concern is. From speaking with my specialist for the second mortgage, it appears that the way it will go down is that the first mortgage will give second mortgage 3K at closing bringing down my balance to 26k. I was told that they will set up a repayment plan of the remaining 26K over 30 years at 0 percent; about $74/month. After closing, I will then be able to negotiate with recovery department and possibly do a settlement. Is this the normal protocol? It is kindof scary that it seems I can not deal with the settlement before closing. Any thoughts?

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Property Value: 60K
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2[SUP]nd[/SUP] Lender: Fifth Third
2[SUP]nd[/SUP] Loan Balance: 29K
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#97
msugirl,


I posted a suggestion in your thread.
 

miked2023

LoanSafe Member
#99
Mortgage Debt Forgiveness Acts protects you from federal taxes, but not CA. So you would still need to deal with CA taxes. Consult CPA for details, but generally if you're insolvent that could help as well as any deductions that you might have.
I thought California had its own Forgiveness Law and if the loan is considered non-recourse aren't you all set either way?