Foreclosure in Dublin>Question Details

Shortsaleq, Home Seller in Dublin, OH

I completed a short sale earlier this year. The 1st mortgage is forgiven, 2nd was only awarded 3K and want the rest. What are my options/obligations?

Asked by Shortsaleq, Dublin, OH Thu Jul 7, 2011

2nd mortgage released the lein but sent me a letter saying that does not release me from the remaining balance owed to them. I did not qualify for the HAFA program because my hardship was relocation for a spouse's job, not mine. Am I obligated to pay the outstanding balance even though they agreed to the settlement with the 1st mortgage holder and released the lein? My realtor a certified short sale person said no, an attorney I spoke with said they usually don't go after it in his experience. I cannot find a difinitive answer anywhere. I'm not one to walk away from my obligations, at the same time, I have always paid my debts and feel the banks were part of the problem creating this mess in the first place so why should they not eat the loss instead of me!

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Shortsaleq unless you have a letter from the second lien holder that says your debt is forgiven then the debt is not forgiven. Releasing the lien on the property and forgiving your debt are two different things. In my area I have seen second lein holders go to common pleas court and get a judgement for nonpayment and garnish wages and attach property.
The second question for your attorney should have been ---- What happens when they do go after the deficiency? Banks are coming after their bad debt more often as the federal government is holding them more accountable.

Good luck and call that attorney back.
0 votes Thank Flag Link Fri Jul 8, 2011
In the last few years, we have come across a LOT of people who are upside-down on their home loans:

I have tried, and I know a lot of my compadres have tried; to tell people that;
1.) Just because you are upside-down on your house does not mean you are entitled to walk away from it.
and,
2.) There may be remmifications for walking away!!!

these rammifications could include;
1.) lowering of your credit score
2.) Deficiency Judgement from the Bank for the difference owed
3.) Outstanding Income Taxes for profiting from the loss
4.) Outstanding Property Taxes
5.) Unusual Arbitration or Mediation or Law Suits

Please do not assume that walking away is your best alternative with investigating alternatives.

Good luck and may God bless
0 votes Thank Flag Link Thu Jul 7, 2011
Foreclosure in Dublin......Sounds like the fine print never intended to release you on the Second Mortgage lien/ If you need a good Short Sale Attorney here in Columbus.--- Contact Scott Stevenson of Northwest Title. He's one of the best in Central Ohio and knows everything there is to know about Short Sales.

Chris Anderson (614) 563-HOME
0 votes Thank Flag Link Thu Jul 7, 2011
Well the Attorney is either not very up on short sales or is not a Real Estate Attorney, The lender can come after you anytime with in five (5) years of the date of the closing of the short sale, they have not forgiven you and they now have no equity tied to their loan as security so they may take drastic measures to get back their monies, then again they may just leave it over your head till the statue of limitations dissolves it! But 2nd mortgages often get screwed by 1st mortgages, so they often go after any situation that they still have loan amounts left after completion of short sale, they are not as forgiving! The first mortgage got 70 -90 cents on their dollar and it seems they gave the secondary mortgage about 10 cents on their dollar, Both can still go after you if they do not send you a 1099 form at years end for your income tax. Any amount you have been forgiven becomes Income you need to pay taxes on! :)
0 votes Thank Flag Link Thu Jul 7, 2011
You had better get an attorney. If you didn't sign anything from the second lien holder that said you wouldn't owe them then they CAN come after you for the balance.

>>My realtor a certified short sale person said no

I hope you got that in writing....

Good luck.
0 votes Thank Flag Link Thu Jul 7, 2011
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