Short Sale California

I’ve been advised to short sell my home (rental property) by my broker, because I cannot continue making payments.However, I received a letter from my lender, Bank of America in California stating, “As the Mortgagor, you will be held responsible for any remaining balance owed.”

Does that mean that I could be stuck paying on a loan I no longer have anything to do with?

Can they require me to payoff the debt even if I short sell my home?

I would greatly appreciate your answers!

Claude

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Hello Claude,

Read: Short Sale & Mortgage Insurance

You have to look at the alternatives to a short sale to know whether or not that is an acceptable clause.  In California, the most popular method of foreclosure is by power of sale which is outside of the Court and a deficiency judgment is only permitted with judicial foreclosure.  A third scenario is if the security for the loan is valueless as may be the case with a junior lien and in certain circumstances the lender may have the option to sue on the note.

Know where you stand with the alternatives and I’ve got to say that California is a homeowner-friendly state for foreclosure.  Did I mention to read Short Sale & Mortgage Insurance?

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.