Home Selling in 37830>Question Details

Smiling74, Home Seller in 37830

We had a house in florida which our first mortgage holder released for short sale. They are also the 2nd mortgage holder. We did not reaffirm the 2nd

Asked by Smiling74, 37830 Sun Jan 31, 2010

mortgage with them. Can they pursue us after they approved the short sale on the first mortgage?

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It depends. Some states are either recourse or non recourse states and some loans have recourse verbage in them. In a recourse state, unless otherwise agreed to at the time of the short sale, the lender can come back at a later date for the amount of the unpaid debt. Especially a 2nd lien.

You need to check the verbage in your mortgage papers regarding the banks recourse options. With short sales, it's possible to be released of the lien but not the debt. It all depends on what is in the mortgage papers and if the short sale is negotiated to be released of the lien and the debt.
0 votes Thank Flag Link Sun Jan 31, 2010
I agree with Kathy, you must work with both lenders to get it approved.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Sun Jan 31, 2010
Yes!

Both lienholder's have to agree to the Short Sale for it to be considered an "Approved" sale.

The first will usually pay (offer) the 2nd lienholder a share of monies, ($3,000 +). It is up to the negotiator on the 2nd to agree to this payoff. Many times they come back and want more monies to settle.

Your agent should have been pursuing negotiations with both lienholder's throughout the process.

Also, be aware that proceeding with a "short sale" does not stop the foreclosure process! You must stay on top of the whole situation for it to be an "approved" sale.
0 votes Thank Flag Link Sun Jan 31, 2010
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