If I have money in a money market account can Bank of America come after it if I do a short sale?

Asked by Jwill, 94591 Sun Apr 10, 2011

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Eli Givoni-S…, , Boca Raton, FL
Mon Apr 11, 2011
We would negotiate with your lender to try to get you off the hook for the deficiency. It's unlikely the bank would just "come after" the money. If your financial picture is strong, and you have substantial savings, the bank may ask for a seller contribution. Each file is different.

We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
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Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
1 vote
Great Response! Make sure your Realtor whom you carefully select on working with covers all the bases with BOA/lender and/or their negotiator and requests a judgement of deficiency letter from BOA/lender stating this will not be a claim to the seller down the road after the transfer of sale. Some will comply some will not , some will verbally want a answer per seller, which doesnt make sense to me, verbal is nothing. For example: Recently dealt with the MI company wanting the remaining $20k paid in 74 month installments prior to accepting offer and moving on with purchase , which seller agreed to. At this point and prior to seller acceptance on offer sheet, I requested the judgement of deficiency stating they will not move forward on claiming to collect the def amount, BOA said they will not provide that. So depends on bank and sometimes MI group. From this case it was either both or none.
Good luck and thanks for the good info and answer Eli
Flag Wed Apr 4, 2012
Robert Range, Agent, Reno, NV
Mon Apr 11, 2011
The more money that you have available, the more likely it is that the Bank will ask you to contribute at the closing or carry a note for a portion of the deficiency after closing. I believe that retirement accounts are protected against deficiency lawsuits, however I have had banks in short sales (usually 2nds) focus in on those balances and ask the seller to make a hardship withdrawal from those accounts and contribute at closing if they are going to approve. At that point the seller has to make a decision as to whether the short sale still makes sense for them financially.

Robert Range
Prudential Sierra Nevada
Web Reference:  http://www.RobertRange.com
1 vote
Suzanne MacD…, Agent, Succasunna, NJ
Mon Apr 11, 2011
The answer is, it depends. How much money? Is it a retirement account? Will there be a penalty to you for withdrawing the money?

The others are correct, the bank may decide that you do not really have a hardship. Or, they may ask you to sign a promissory note and make a contribution toward their losses. Or they may give you the option of making a one time, lump sum payment OR signing a promissory note for a larger amount but with payments spread out over time. I saw this recently with a short sale I handled, the couple had put aside some money thinking they would one day be able to purchase another home and the bank insisted they contribute toward the loss in one of these two ways.

The best thing you can do at this point is talk to a good realtor experienced in doing short sales and talk to an attorney with an equal background in negotiating short sales. There are just too many variables to answer the question at this point.
1 vote
John Juarez, Agent, Fremont, CA
Sun Apr 10, 2011
If you have money that would allow you to continue to make payments at the same time that you are telling the bank that you can no longer make payments, I think the you can see that there may be a problem in getting the bank to approve your short sale.
It is the totality of your situation that the bank must consider in approving your short sale. Life goes on after the short sale. You need to live somewhere and that will cost you money. You may need first and last month’s rent and security deposit. If you don’t have any cash, how can you move to a new place to live? Every situation is different. For that reason, it is not really possible to answer your question.

I will say that, if you are trying to hide money from the bank…well, fraud is a very ugly word.
1 vote
Diane Wheatl…, Agent, Upland, CA
Sun Apr 10, 2011
Dear Jwill,

It's not that they would come after it and take it from you, it is more about the fact that you have additional funds they feel could be used to cure your default or at least make a seller contribution to the short sale approval. The banks know what assets you have and how much. They run many types of checks on each homeowner to discover if that homeowner may be withholding assets that could be converted into a payment to them.

The banks want you to play fair. If they are taking a huge hit on their investment then the seller should contribute as well, if they have the ability to.

Good luck! Sorry that you are having to deal with these issues.

Diane Wheatley, Broker
diane@moveupproperties.com
1 vote
Lisa Jonsson, Agent, Capitola, CA
Wed Apr 4, 2012
It depends on a number of factors. There are new laws that protect you, but several things can come into play such as, is this your primary residence, how many loans are on the property, and so forth. You may want to discuss all the details with a real estate attorney. There are some pre-paid legal services that are very reasonably priced that can answer your question in detail without breaking the bank.
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Wed Apr 13, 2011
Retirement accounts are protected but you need to make sure this qualifies as a retirement account, otherwise, the bank may ask you to pay a little bit of the difference. Please make sure you are working with a knowledgable Realtor.
0 votes
Christopher…, Agent, Irvine, CA
Mon Apr 11, 2011
Hello Jwill,
I've negotiated all of my short sales on my own and over 90% of my clients had some sort of retirement account (i.e. IRA, 401k, MMA etc). Never once had the lender gone after the retirement accounts.

Chris
Web Reference:  http://www.chrissuh.com
0 votes
David Cooper, Agent, Los Angeles, CA
Mon Apr 11, 2011
Robert Range states" I believe retirement accounts are protected" Yes, except one of my clients was told to cash in his retirement to pay his mortgage before the bank would consider a short sale. This short sale business is nothing less than "high stakes poker"

David Cooper Las vegas foreclosure Investor in Bank Owned REO houses with Cash Flow. email or call for free list +1-7024997037 not a real estate agent
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Sun Apr 10, 2011
So many factors come into play when doing a short sale. You must prove insolvency to do a short sale whether you have money or not. There is also the factor of is this your primary residence that you are short selling? They may ask for a cash contribution and you can decide at the time if you are willing to do so or not. Talk to a local Realtor skilled in short sale negotiations.
0 votes
The Roskelly…, Agent, Gambrills, MD
Sun Apr 10, 2011
BOA is going to be looking for a verifiable financial hardship. So if you have money in a savings or other account that you could use to offset the debt that you owe them then it is likely they will discover that. They may not come after it but they may deny your short sale. Consult an attorney.
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Apr 10, 2011
No professional can render an opinion on behalf of another professional confer your questions to an attorney

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Paul Winders, Agent, Vallejo, CA
Sun Apr 10, 2011
That would be more of a Legal than Real Estate question. I would think that they could not "come after" any money without a judgment which I presume that they do not have. You should list all assets when you apply for a short sale. I have seen clients with assets get short sales approved........ Be careful with the wording on your approval. Have a lawyer review your approval.
0 votes
David Cooper, Agent, Los Angeles, CA
Sun Apr 10, 2011
The first question B of A is going to ask "what is your hardship" and then they will ask for a list of assets and liabilities. The banks I have worked with want to see NO assts of any type, including using up your cash and credit lines before they see a "hardship" Iy depends in how much cash you have vs. the total debt you owe.


David Cooper. Las Vegas Foreclosure Investor in Bank Owned Houses with huge Cash Flow. Call for FReee
list. +1-7024997037 not a real estate agent.
0 votes
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