Short Sale denied with offer at FMV, property went into foreclosure for less than the short sale offer... Do we have a case to stand in court?

Asked by Ana Sands, Orange Beach, AL Thu Nov 11, 2010

We owed $520K our house in Alabama. I applied for a HAFA short sale due to financial hardship. The house appraised for $295k and we had an offer fro $290K. The HAFA was denied, however the mortgage company (Aurora Loan Services) said that we could do a traditional short sale if we either gave them $50K cash or signed a 10 year interest free note payable. We do did not have $50k and did not sign the $100K note payable. We told the mortgage company that since the FMV of the house was $295K and the current offer was for $290k that we would come up with $5k so that they would get the FMV of the property. They denied the short sale. Nedless to say, the house went into foreclosure and the bank bought it back for $270 and now we just found out that the buyer that offered us $290 for the house during the short sale, just bought the house from the bank for $250K. Does "Plaintiff failed to mitigate damages" apply? Do we have any rights?

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Shane Willis, Agent, Pensacola, FL
Fri Apr 8, 2011
Keep your documentation and if a deficiancy is filed contact an attorney to find out options....if any. That is really all you can do at this point.
0 votes
Keith Manson-…, , Milwaukee, WI
Mon Nov 15, 2010
The lender does not have to offer you any loss mit options. All they have to accept is a full payoff! Your situaition happens more than I would like to admit. Keep the records just in case a 1099c or a deficiency is filed against you. But what is done is done. Start your new life.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
0 votes
Bob Movin-On, , Hartford, CT
Thu Nov 11, 2010
Get a free consultation from an attorney but I do not believe you have a case, once the bank owns the house they can do with it what they choose. I would keep that information in case they ever attempt a deficiency claim.

Bob Patrick
Buy a home after foreclosure expert
Movin-On LLC
Getting victims of foreclosure back into a home in as little as 6 months
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