Foreclosure in Atlanta>Question Details

Jdowe, Other/Just Looking in Springfield, VA

what are the repercussions of a bank appvd short sale for a sale price substantially less than the amt owed?

Asked by Jdowe, Springfield, VA Sun Aug 24, 2008

Thanks for a quick turn-a-round of ur response as I would like to tell my friend when I talk to them next wk
They say they got appvd for a quick sale that is substantially less than what they owe the bank. I'd like to
tell them before hand when they agree to go to settlement with a buyer.

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There are numerous repercussions. Here's one of them: Your friends will be persona non grata in the mortgage world for years to come. A short sale is a type of major mortgage default, treated no differently than a foreclosure when it comes to evaluating a person's credit profile. The mortgage industry forgives bankruptcies far sooner and easier than major mortgage defaults.
1 vote Thank Flag Link Sun Aug 24, 2008
James and Matt are right, and the advice of making sure that they talk to an attorney is key.

The bank may want more than just that short sale renumeration - if they have cash assets or easily liquidated equities, above and beyond any other revolving debt, then beware.
Web Reference: http://intowninsider.com/
0 votes Thank Flag Link Mon Aug 25, 2008
What you are really asking for is legal advice and only an attorney can give you that information. From my experience, I have seen banks handle short sales many different ways. I have seen them have the seller sign an unsecured note at the time of settlement stating the terms of repayment. They can also legally attempt to collect the amount through the courts. They can also write down the debt and not pursue the collection at all.

This is something that as a Realtor working with sellers in a short sale situation, I always get clarification on when obtaining approval from the bank on the short sale. The repercussions are negotiable with the bank just as their approval of the short pay is. There are credit implications as well but usually better than a foreclosure from what I understand.
Web Reference: http://www.MattNewman.com
0 votes Thank Flag Link Sun Aug 24, 2008
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