I have Short Sale lot listing in Santa Rosa Beach, Florida. Values in that market area have dropped 50% for vacant land. There is about a ten-year inventory for sale. That means, at the current rate of sales, it would take ten years for all the lots to sell. My Short Sale seller's income has declined such that he can no longer afford mortgage payments on his land. His lender is Whitney Bank. We submitted an offer to Whitney for the full Whitney-appraised value, half of what is owed on the lot. Guess what? They will not do Short Sales. They will never forgive a deficiency. Here is a quote from Whitney Bank's letter to my seller:
-Contract Offer Response for Lot 2, Main Street
Dear Mr. Jones:
Whitney does not do short sales as satisfaction of debt. Rather, Whitney's release of the mortgage will be executed on the express condition that Whitney is reserving its rights to collect the deficiency. The net sales proceeds derived from the proposed sale of the collateral would be applied towards the outstanding loan and you would still be responsible for the balance of the loan whereby we would attempt to restructure it under a workout repayment plan acceptable to the Bank based upon receipt of current personal financial information.
Respectfully,
Special Credits Department - Central Gulf Coast Region
So, know- if you are going down the Short Sale path with Whitney Bank, you will be liable for the entire deficiency.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Whitney Bank Short Sales? Don't Ask!* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.
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Thanks for the heads up, Wendy! Here is something we often use in situations where the representative, or bank, is threatening a deficiency judgment. Here it goes.
Mr. or Mrs. Loss Mitigation rep, isn't it Witney Bank's policy that in order to stay in compliance with the IRS, upon completion of a Short Sale, you have to submit a 1099C to the Seller due to the "forgiveness of debt"? (In most cases, the person will say "yes".) Then, if a 1099C, which represents a cancellation of debt, has to be sent to the Seller, in order to be in compliance with the IRS, then how can there be a deficiency judgment? Remember Mr., or Mrs. Loss Mitigation Rep, you do not want to be out of compliance with the IRS, don't you?
You will often hear, "Hold on, I have to speak with my manager about that."
Hope this help in your future Short Sales.
Michael Spickes
Speakers ~ 2008 NAR National Convention (Orlando, Florida)
www.ShortSaleSolutions.biz