Watch Out for a Short Sale Deficiency Judgment

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In the video above, we discuss dangers that Orlando homeowners often encounter with a short sale. One such risk is that the bank has the legal right to pursue the full amount of deficiency judgment.

A short sale is the process through which a person sells their home for less money than the balance they owe on the mortgage. The term “short” means the sale is short of a full payoff on the mortgage.

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Call 855-Kramer-Now (855-572-6376)

Florida Banks Have the Legal Right to Sue for the Deficiency

Both parties—the bank and the borrower—agree in advance to the short sale process. But this mutual consent does not necessarily release the borrower from the burden to pay the deficiency, which is the difference between the short sale price and the original value of the mortgage.

The bank is going to either forgive the deficiency, or get a deficiency judgment against the homeowner requiring the homeowner to pay the bank all or part of the difference.

How to Avoid a Short Sale Deficiency Judgment

In the video, we explain the importance of the bank releasing the borrower from a deficiency. To accomplish this, our foreclosure defense attorneys obtain a waiver of deficiency or release from liability from the bank or lender in advance of the short sale.

We also make clear to both the realtor and any prospective buyers that our client will not perform any short sale unless the bank releases our client from future liability or agrees to waive the deficiency. This requirement should be inserted into both the listing agreement and into any purchase and sale agreement.

Orlando Attorneys to Protect You in All Matters of Foreclosure

Our duty in foreclosure defense is to protect our clients’ economic status, keep them safe from deficiency judgments and other threats, and ensure they do not enter into actions that may be financially perilous for the long term.

A good foreclosure attorney can be highly effective in getting a prompt and proper response from your mortgage lender. The entire short sale process requires a foreclosure lawyer with the skills to negotiate these transactions with numerous lending institutions and real estate agents. Contact TK Law to learn more.

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