CA. I am selling my home in a short sale.Fannie Mae approved, PMI company is asking for a promissary note of 20 K we can't afford this, what

Asked by Klsc, Ukiah, CA Sun Feb 13, 2011

now?

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6
Josey Shun, Agent, Santa Rosa, CA
Thu Jul 5, 2012
I am just wondering what is your listing agent said about this situation?
If you don't have one, I can help you. My office is in Santa Rosa, I live in Ukiah.

Generally, in Short Sale, first lien gets 90% of 'lender approved' sales price, 7% pays agents' commission and other trasaction fees such as tax, 3% pays 2nd lien.

All unsecured liens (if PMI did not put lien on the property, it is unsecured lien) are gone 0%.
0 votes
Steven Ornel…, Agent, Fremont, CA
Mon Feb 14, 2011
Hi Klsc,

Please seek the advice of a CPA and RE/Tax Attorney. These are the ONLY experts you should be getting advice from when it comes to any “distressed selling”. Once you have a strategy THEN inform your Realtor® so the strategy can be executed.

Sameer has offered that if your loans are purchase money loans (never refinanced original purchase loans) then you are protected from a deficiency judgment. I’m not positive this is completely true as it is my belief this law only applies to a first deed of trust loan.

If you review the link Sameer supplied you will also see that any Promissory Note you sign MAY be subject to rescission:

“Although some lenders disagree, it has been argued that the anti-deficiency protections of CCP 580b would continue to apply even if there were a short sale and the property were released from the deed of trust with the consent of both the lender and the borrower. If a borrower were to execute a promissory note to the lender for the amount of the deficiency following a short sale, it has been argued that such deficiency note would be subject to rescission on the grounds that there was no consideration for such deficiency note since the borrower was not legally liable for any deficiency that is represented by such note.”
See: http://www.calbankers.com/compliance-bulletin/clone-new-empl…
Para 5 under “Analysis of CCP 580e”

However, if you placed the property into a Trust, section “Exceptions for Corporations and Public Agencies“ implies you will not be protected!

Again, I would highly advise you read the link that Sameer provided in its entirety and then make an appointment to speak to both a CPA and RE/Tax Attorney! The actual text of SB931 can be found here:
http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sb_9…

Best, Steve
0 votes
BayAreaHomeR…, Agent, Vallejo, CA
Sun Feb 13, 2011
kisc

if your loans are purchase money loans, then they can't do nothing about it...

heres the link to it

http://www.calbankers.com/compliance-bulletin/clone-new-empl…

now if you refi the property, then like the board says, consult an attorney..you probably need to prove to them that your job may not continue and you dont have the ability to pay now or in the future.

good luck.
0 votes
Sindy Verdugo, Agent, Long Beach, CA
Sun Feb 13, 2011
Thank you for this post. I get questions from clients all the time asking if they will have to pay any of the money back that gets short. I had heard that the banks are asking for money back, I guess it is the PMI company that wants the money back, this makes sense.

You can say no. You assumed when you accepted the short sale offer that you would not have to pay any out of pocket. If you don't agree, they will have to cancel the agreement. If you go to foreclosure, I don't think you will be asked to pay, as the security for the loan is the house.

I don't think the realtors will be able to come after you for commission as you did not agree on the $20k promisory note.

Ask what are the consequences if you cancel. Maybe someone else can come up with the 20k, maybe you can all pitch in.

You don't have to do it. Noone can make you. There may be other consequences to saying no find out what they are. The benefit is that you will be able to stay in the house longer.

An attorney can help also. But, the brokers and escrow company can give you lots of advise if you just ask lots of questions.

Asking on Trulia was a good idea.
Web Reference:  http://www.FreeCMA.net
0 votes
Dp2, , Virginia
Sun Feb 13, 2011
You should run this past a real-estate attorney.
0 votes
Eli Givoni-S…, , Boca Raton, FL
Sun Feb 13, 2011
First try to counter-offer. If that doesn't work, accept it. Keep foreclosure off your credit and re-negotiate it later.

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
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states
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