Short Sale VS Foreclosure

Why isn't the lawyer trying to negotiate the short sale as payment in full without pursuit of deficiency judgment?  Do you have an offer on the house?   I'm no legal expert, but a 30K note sounds much better than a 250K judgment.

The lender is only offering a lien release and not settlement letter? How's your client's credit? If it's already really bad, then it may make sense to walk away from the property. In AZ, if the bank forces a sale they can NOT get a deficiency judgement and the bank assumes all losses. All my short sale contracts are contingent on receiving a settlement letter from the bank and not a lien release. However, with that said, $30K over 25 years at 0% sounds pretty good to me as long as it shows paid in full on the credit report.

Marty

Trying to get a personal note is the typical 1st step of the lenders. Thankfully your client got leagal advice on that.

Since short sale has been approved, you may want to team up with a realtor who is experienced, knowledgeable, and successful with short sales.

When you get an acceptable offer on the property, there is verbiage to include in the contract regarding lender acceptance of short sale w/no dificiency judgement (either the attorney or the realtor working with you can help you with that).  Then negotiate the contract with the lender(s) involved. Teaming with an agent experienced and successful with short sales, will help you learn what you need to do to best serve your client(s)

You will need to submit complete package and documentation with the offer, be prepared to negotiate between the lenders if more than one loan or lenders are involved, and keep in constant contact with the lender(s) once you have submitted the offer and the supporting package.

Best of luck

In Washington State we have a non-recourse and recourse loans. If the money was all purchase money or money used on repairs the lender has no recourse- Non-recourse loan. If the borrower/seller refinanced and pulled cash out of the home that loan would be a recourse loan and the lender has the rights to collect on it just like a credit card. I am hearing now that realtors are not properly educating the sellers about their options and even if they are not signing the document the lenders are selling these off to collection companies and attorneys at a discount and the cooection/company attorneys are seizing bank accounts and garnishing their pay checks. It is so important that realtos disclose in writing that they were advised to first try to negotiate with the exisiting lender, have spoken with an attorney and a CPA.