Diana, Home Buyer in Buffalo, NY

We are buying a short sale property and fianlly got a date to close from the agent. The title search done by

Asked by Diana, Buffalo, NY Thu Dec 4, 2008

the mortgage company shows that the seller has 2 mortgages on the property and some back taxes. Are we as the buyers going to be liable for any of this debts if the amount from the short sale does not cover it? We have an addendum to the contract that we have to sign reflecting the new closing date , with a 3 day lawyer review period since the last 2 dates did not happen . We have been holding off spending for a lawyer as this may not push through. Any expert advice?

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Sonya, , Allentown, PA
Thu Dec 4, 2008
BEST ANSWER
are both loans with the same lender? If they are both with the same lender than the short sale approval letter from the lender should state that both mortgages are included in the short sale. As far as the back taxes, they should be taken care of at the closing on the settlement sheet as paid by the seller. If there is not enough money to cover the short sale amount, then the short sale shouldn't take place. It will be in default of the short sale approval letter and I believe that you would need a new approval from the lender for the lesser amount. Hope this helps.
0 votes
Judi Wolfson, Agent, Margate, PA
Fri Dec 5, 2008
You MUST get a lawyer, especially in this case. Even being a Realtor, myself, in this case I would get an attorney.
0 votes
Gina Chirico, Agent, Fairfield, NJ
Fri Dec 5, 2008
Diana,

You most definitely need to hire an real estate attorney at this point. As we may be experts in the real estate profession, none of us can offer legal advice. With that being said, is the second mortgage the same lender? If not, when there are two different lenders on a short sale property, BOTH lenders must approve the short sale offer. In the past and prior to the inflation of short sales and foreclosure properties, the second lienholder (typically the lienholder for a home equity loan/line of credit, etc) was getting beat out of short sales. The primary lender (typically the original mortgage lender because not only are they the first lender/payee on the property but also because they are usually owed the most money) would call the shots on a short sale and the second lender would not collect anything. Over the past year or so the secondary mortgage lenders have now been demanding that they receive some of the proceeds from a short sale. So if the second lender is not the same as the first or has not yet been made aware of the short sale of the property...your timetable may start all over again. Is this the first time you've learned of the second lender? Even if its your first time of learning there is a second lien, was the listing agent aware? If the agent was aware, they should have contacted the second lender, along with the first lender when they submitted the short sale package.

Again, seek the advice of a real estate attorney to determine what is best in your situation.

Good luck.

Gina Chirico, Sales Associate
Prudential NJ Properties
973-715-1158 cell
973-992-6363 ext 116
GinaChirico@PruNewJersey.com
0 votes
Sharon Kozinn, Agent, Hillsdale, NJ
Fri Dec 5, 2008
Now is when you need to contact a lawyer on your behalf. They will be able to answer your questions and clarify all the information for you.
Good Luck.
Sharon Kozinn
Web Reference:  http://sharonkozinn.com
0 votes
Joan Prout, , Basking Ridge, NJ
Thu Dec 4, 2008
Get a real estate attorney. Most don't charge a retainer up-front in NJ. but get paid at closing. I have a couple of attorneys I can recommend, one even specializes in short-sale and foreclosure sales.

Joan Prout, MBA
Broker Associate
RE/MAX Villa REALTORS
306 Grove Street
Jersey City, NJ 07302
201-946-2700 x310
800-671-0596 x1 (direct)
Joan@JoanProut.com
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