No Mention of the Deficiency?

Hi Paul,

My lender has finally approved a “Short Sale,” however they will put in writing that they will not be filing a deficiency judgment against me for the difference.  They have verbally said they will not be to my broker. 

Should I be concerned or accept them on their word.  I have already dicussed the tax ramifications and my accountant said I will be fine.  I have a second/HELOC that was taken out at the time of purchase which was utilized as the additional 10% of downpayment so I wouldn’t have PMI. 

Any advice/suggestions would be appreciated. 

Thank you,
Anele
Florida

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Hi Anele,

In some cases with some lenders, that is the best that you can expect.  Your next move is up to you.

As a side note, it can be helpful to have the purchase and sale contract make reference to “this contract contingent upon seller receiving a full release of liability from XYZ Lender with no right to pursue a deficiency after closing”.  Then, the broker has more ammo in negotiating for you with XYZ.  Of course, your financial situation weighs more heavily with XYZ Lender than any contingency written in the contract.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.