Deficiency and My Family

I’m attempting a shortsale with a real estate agent/broker.  The lender wouldn’t settle for cash offres of $300k and $250k.  Now they want to settle but for $237 and have asked that I sign an inrterest free unsecured note for $30k.  I declined and now the lender said they’ll just get a judgement for $100k (vice just $30k when I fail to pay the note).  Is there any relief for us?  I tried to make the lender somewhat whole (vice walking away like most people have done and this is thanks I get?

Melissa

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Hi Melissa,

Read: Short Sale Deficiency Negotiations and Should I Sign a Short Sale Signature Note

The short sale financial statement submitted to the lender as part of your workout package requires you to detail all of your expenses.  I was reviewing one the other day in my office.  The borrower had listed $200 per month for Food for the entire household.  Two-hundred dollars per month for Food is more accurately what a household of one would need to budget at minimum.  The short sale financial statement also neglected to accurately represent any Auto Expense.  With gasoline at sky high prices and the inevitable car repair on the horizon, these are actual expenses.  Even worse, the shorting lender calculates the amount you can afford based (in part) on these estimates.  There’s no reason to lead them into a false belief that you can afford a payment any higher than is true.  Making such underestimates are to a borrower’s detriment.

In conclusion, no one should lie on the short sale financial statement; the Broken Credit Bloggers won’t be led down that path, although making statements and presenting a stronger financial picture than is true is equally as bad.  Heck, that’s what got the mortgage industry in this problem in the first place.

Thanks for the questions and hope this helps.

Paul