Trulia Voices Real Estate Q&A

Vera Banks
Home Seller
Chicago

after the short sale, is the seller responsible for the rest of the mortgage balace. for instance the

Fri Jan 25 2008, 15:32 - All locations - Foreclosure - 2 answers

mortgage balance is $90,000 and it is short sold for 60,000.. is the seller responsible for the remaining $30,000. this short sale business seems to be complicated, risky and tricky. Could be because I d simply don't understand. you hear so many stories.

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FIRST: Keith Sorem

Christine Mosci…
Real Estate Pro
60601

Sun Mar 16 2008, 09:41

To add to Keith's reply, the lender also can file judgement on any remaining balance due (after short sale) which in turn will ruin your future creditworthiness if not repaid.

Web Reference: http://www.eHouseHuntOnline.com

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Keith Sorem
Real Estate Pro
Burbank

Fri Jan 25 2008, 17:51

FIRST ANSWER

Vera
You should read my blog, is will answer a lot of your questions.
The concise answer is that a short sale, by definition, is when the lender accepts payment for less than the amount of the mortgage. Congress passed a law in December protecting certain home owners from potential tax penalties for the "foregiven" portion of the loan, typically treated as income. So not only would you lose the equity in your home, you'd receive a nice tax bill.

Short sales are common when there are large shifts in home values due to the economy. They are scary, but better than a foreclosure on your credit report.

Post more questions if you have them.
Keith

Web Reference: http://activerain.com/blogsview/125091/How-The-Foreclos...

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