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Bank of America Short Sale Negotiator update
Finally, some honesty! I just had a great conversation with a negotiator from Bank of America for one of my short sales. The good news is that the short sale was approved. The bad news is that Bank of America's approval letter provides for them to pursue a deficiency judgement for the difference.
This loan was a "purchase money", "non-recourse" loan in the state of California. That means that the only recourse the bank has is to foreclose on the property. So, the upshot here is that if the owners sign that short sale approval letter they then become liable for the difference.
Of course, no responsible real estate agent would allow their client to sign a letter as such without attorney review. And, of course, no attorney would advise their client to sign that letter because it makes the future consequences worse than foreclosure.
The negotiator at Bank of America says there is no way to change the letter to a "non-recourse" approval. He says that Bank of America requires this language on all short sale approvals. He also suggested that I give any future Bank of America short sale clients a copy of the recourse approval letter in advance so they can agree or disagree ... more

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