Brian,
Talk to a real estate attorney and or a public accountant.

Jes Sierra, B.Sc.
http://www.banklisthomes.com

Brian, do you need a successful short sale Realtor? You should not wait with these types of transactions.

The letters that the lenders use are written for real estate across the country. The phrase that you are asking about is included in many short sale letters these days. It's important for you to know and understand what pertains to you and California real estate law for purchase money loans. What remains enforceable will vary by state. Do your research and don't sign anything unless you fully understand it. What did you realtor advise you to do? Seeking legal and tax advise is very important. Good luck to you!

Brian,

My name is Darren Tunstall Keller Williams in San Diego. My partner and I specialize in Short Sales all over the county and have a successful track record. Are you open to working with an agent who specializes in short sales?

Many of your questions can answered on my personal website in the short sale section. See the web link attached.

Let's talk quickly The sooner, the better - Your credit will love it!

Talk to a real estate attorney. The bank is not going to change what their terms are...but you should know what it means. The other alternative is to look at dead in lu...

Good Luck.

You definitly need to see a Real Estate Attorney!

The point of a short sale is to get out from under the debt of the mortgage. This is why your lender needs to send you a 1099-C after the short sale. The “C” in “1099-C” stands for “Cancellation of Debt.” Your lender cannot write off their loss on their corporate taxes, send you a 1099-C so you have to pay taxes on the loss, report the short sale as a “settled debt” on your credit and then turn around and go after you for the money.

There can also be Federal and State tax issues. Your CPA can advise.

If you hire and inexperienced short sale agent or negotiator who does not negotiate a full release from your lender, then, yes, you could be liable for the money the lender loses in a short sale or end up being forced to sign a promissory note to close the deal.

We do not ever recommend that our clients sign a promissory note or close escrow without a full written release from their lender(s).

Again, consult an attorney and CPA>

This is something other lenders do as well. You can try to bluff and say you won't sign in escrow, you can threaten the lender with BK and then the second will get nothing. Often they will release the second for 5% and make you aware that they still have the right to determine the deficiency at a future date. In any case, let's say you go with signing a promissary note; you now converted the secured second into an unsecured note, just like a credit card. If this is your home then there is no 1099 on the forgiven debt. You can always declare BK at a future date if you can't nickel and dime them. On an investment property, rules are different.

Do NOT Sign Anything until you see a Real Estate Attorney.

This is a fairly common phrase in Short Sale Agreements.
It gives them the right to come after you later,
for the money that they "lose" on the Short Sale.

Again, see a Lawyer.

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Best wishes to you,
Fred
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