Deficiency Judgments in Short Sales
Can You Walk Away?
It is a common myth that California is a “non-recourse” state in that if you sell your property for less than you owe or if you foreclose on it, your lender(s) cannot come after you and you can walk away. Unfortunately this is not entirely true. While there are some situations and circumstances that would preclude a lender from coming after you there are far more that allow them to (even in California). We get calls all the time from homeowners who either foreclosed or did a short sale a few years ago and now their lender is suing them. You need to use a top short sale attorney and short sale agent to negotiate and close your short sale.
Most of them are completely shocked, some of them even had their real estate agents advise them to sign contracts, without the advice of an attorney, holding them liable by telling them that after the short sale they would not be liable…when they were! We have seen many people forced to file for bankruptcy when if they had the proper representation in the first place regarding their real estate decision, they never would have had to.
Short Sale Approval Terms
When a successful short sale is negotiated, the agreed upon price is considered settled as payment in full. The lenders are not allowed to come after the homeowner after the short sale and we make sure that we get this in writing. It is not the same case with a foreclosure, so if you are thinking about letting your home foreclose please call us first.
In California, there is a bill that was passed and went into effect in July of 2010. SB 458, which was codified in C.C.P. 580 (e), has limited the banks’ ability in California to pursue borrowers for deficiency. Many smaller and out of state banks who made loans in California are still unaware of this and so caution must still be taken. For questions about what situations and loans this law applies and if it can help you please contact us for a free attorney consultation and free home value property report.
Exceptions to the new law include but are not limited to a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.
It is still critical to make sure that you get IN WRITING in the short sale approval language that states that once the short sale closes in accordance with certain terms and conditions that you will no longer be liable under the lien to the lender or their investors. We do this for all of our short sale negotiations and an attorney always personally reviews each approval to make sure that it is sufficient enough to protect the seller and then discusses this approval with the seller.
Experienced Sacramento Short Sale Attorneys and Sacramento Realtors
We are experienced Sacramento Short Sale Real Estate Attorneys and Sacramento Short Sale Realtors. We are a unique and powerful combination and can help you with your real estate legal issues and short sales. We have helped thousands of people with pressing real estate issues find solutions and relief through the use of short sales, deed in lieu of foreclosures, strategic foreclosures, mortgage debt settlements and legal real estate review and advice.
Our short sale real estate attorneys have achieved proven results and can give you the great legal advice and strategy needed to get you the results you want. Contact us today to schedule your complimentary attorney consultation by clicking HERE or by calling 916-999-1376. We look forward to helping you with all of your Sacramento short sale real estate needs.
