As some of you Short Sale Realtors have found, many banks are not as open minded to releasing deficiencies (difference between what is owed and what the lender collects) as they were in the past. (Countrywide who is now BOA) Bank Of America recently established a zero tolerance towards negotiating their Short Sale approval letters. The new language is a follows: "BAC Home Loans Servicing, LP and/or its investor may pursue a deficiency judgment for the difference in the payment received and the total balance due,..."
This language is a little unsettling for sellers who were told that they would owe nothing after closing. Well, for all of you Short Sale seller's out their, you might end up owing money after closing. I know this is not what you want to hear but better now then at the end of the long process of a Short Sale.
A seller who is already demoralized from the start, who has waited months, sending bank statements, tax returns and keeping their home in show ready condition while writing groveling letters to the bank begging for help, are not in the best moods. That is why they just walk away when they find out that they are stuck with the deficiency. They were unprepared for that outcome and Rage replaces Sound Judgment.
The fact is that in many states, like Michigan, if the bank forecloses, the seller will still owe as much or more because of legal fees, penalties and interest then they would with the short sale + deficiency. I know this is a bitter pill but those are the facts. We are trying to make the Best out of the Worst.
Short Sale Seller's out there, before you rip up that short sale agreement that you have worked so hard to get, call a local Real Estate Attorney and make sure that your rejection is based what's best for you not on what you think will hurt the bank the most. The bank does not want to foreclose but is not afraid to do so.
"Whether the Glass hits the Rock or the Rock hits the glass, things end poorly for the Glass", Man of La Mancha
Mike Sher,
Office: (248) 644-4700x242 Fax :(248) 499-1020 Bloomfield Hills, MI 48302 E-mail: mike@mikerealtor.com
CDPE (Certified Distress Property Expert)
MCAR, Short Sale Trainer
Max Brook and Real Estate One Short Sale Specialist.
The Mike Realtor Team Blog - Metro Detroit/Oakland County
Servicing in Southeast Oakland County, Auburn Hills, Birmingham, Bloomfield, Berkley, Beverly Hills, Canton, Clawson, Farmington Hills, Ferndale, Huntington Woods, Northville, Novi, Pleasant Ridge, Plymouth, Royal Oak, Rochester Hills, West Bloomfield, Troy, etc. We worked with: Bank of America, Country Wide, HSBC, EverHome, Litton, GMAC, Chase, Wells Fargo, Flagstar, Fifth Third, Charter One, Comerica, Am Trust, US Bank, National City
But, We Can Help!
This is a competitive real estate market. If you have to sell and can not, perhaps it is time to look at a Short Sale. The Mike Realtor Team has performed dozens of Short Sales for professionals who have lost their job, income has declined, medical problems, relocation, retirement, divorce, loss of spouse, unable to make ends meet, or other reasons not listed.
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