thanks for sharing, I'll keep this in mind. was your client an investor?

Thanks for the blog.  Good information and helpful.  Cheers from Scott Schneider at The Mortgage Money Source in Gresham Oregon.

Katerina-  This was a primary residence, Chase was second mortgage in an 80/20 purchase loan.

Scott- You are welcome. Hope it can be of help.

I don't blame Chase for wanting their money along with any other bank or lender.  Sorry to say there are a lot of people who are trying to use the short sale as a way to dodge their long term financial obligations.  I do feel for those who have lost their job and I especially feel for those who have lost a loved one so I am not against short sales.  Our industry needs to be very careful how short sales are handled, promoted and disclosed.  

Sam-  The only options for those who are pursued, such as in the showcased example, may be bankruptcy, according to my seller's attorney. These sellers lost employment.  I agree, Sam, "dodging" obligations is not exemplary.  However, in these unfortunate economic times, hardships seem to be rampant.  We, as Realtors, should know what legitimate hardships are at the outset of a Short Sale endeavor.  Thank you for adding opinions that encourage discussion.

Thanks for the insight wendy, I just listed my first property with a chase loan.

Mike-  The Chase negotiator implied this was now the policy, period. It is unfortunate.

Wendy - I think we are on the same page...I have also heard that the guidelines on who gets approved for a short sale is changing. 

WENDY- Sounds like chase wants to cause some bankruptcies.

Wendy - With so many short sales going on, you'd think there would be some organized approach to this, industrywide.  I read your blog and sometimes wonder how you do it!  Thanks for sharing, Im sure this info will help.

Sam - Any enlightenment will help!

Mark - I think Chase is going down the same path as Citi. At least we can warn our sellers at the outset.

Laura- There will never be on organized approach unless the federal government intercedes (and who really wants that?) It's private industry.  Honestly, compared to Chase and Citi, Countrywide looks pretty good. Thank you for the compliment.

Sam - Any enlightenment will help!

Mark - I think Chase is going down the same path as Citi. At least we can warn our sellers at the outset.

Laura- There will never be on organized approach unless the federal government intercedes (and who really wants that?) It's private industry.  Honestly, compared to Chase and Citi, Countrywide looks pretty good. Thank you for the compliment.

Problem is that the borrower signed a note that said they will pay the full amount plus interest, etc.  Chase can get a judgement and go after their car, boat, bank accounts, etc. 

Most people leave the house with nothing, but there are some investors that have a lot of CD's, cash, primary residences and do have the assets to pay the loan but chose not.  They do have to fulfill the obligation, but most can't.

Hi Fred- Thank you for commenting. I think in this case their attorney said they might have to do a bankruptcy if that occurred.  Good input!

Fellow Short Sale enthusiasts,

Here is something that may help you out when negotiating with the Loss Mitigation representative.  This has actually worked for us many times in the past.  In a Short Sale, the lender is writing off and forgiving debt.  In order to be in absolute compliance with the IRS, the lender must submit a 1099C (Cancellation of Debt) to the borrower post-Short Sale, which represents a forgivness of the debt.  Your response to the loss mitigation rep should be the following.

"Mr/Mrs __________.  Isn't it Chase's company policy that when a Short Sale is closed, in order to be in compliance with the IRS rules and procedures, Chase must submit a 1099C to the borrower representing a forgiveness of debt?  (Many times, they will say yes.)  Then, if Chase has to send a 1099C to my client (the borrower), then how can there be a deficiency judgment for a portion of, or the remaining balance?"

Many times, they will say that they have to go speak to their manager about this.  More than often, they will come back confused and it weakens their position for attempting to threaten a deficiency judgment.  A promissory note is one thing.  A deficiency judgment is another.

Hope this helps in the future for all of you.

Michael Spickes

America's Home Rescue

www.ShortSaleSolutions.biz

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