BANKS BEGIN TO GO AFTER DEFICIENCY JUDGMENTS - FANNIE MAE POINTS THE WAY
Why do a short sale? Why not walk away from your home instead, it's much easier to do?
Although walking away may be easier, there are distinct differences in the consequences. With a short sale, we can negotiate with the lender. In many cases, the lender agrees not to pursue the home owner for any losses incurred (deficiency judgment). If you foreclose, the lender has the ability to pursue the money they lost.
Michael Collins - SFR - Broker - Rock Realty
(This article is for informational purposes only and should not be considered legal advice. Please consult with a real estate attorney)
Earlier this week I wrote about lenders taking the next step after a foreclosure. Foreclosures happen from borrowers that "walk away" from their upside down valued properties, whether because of job loss, other expenses more important than the mortgage payment, or just a strategic default. You can find the other article at MOTION FOR DEFICIENCY JUDGMENT - FORECLOSURE CONSEQUENCES.
An alarming event occured after I wrote that article. In the past, there has been a pretty heated argument about whether the mortgage lenders are going to move on their ability to pursue deficiency judgments in foreclosure actions. Many people say that it won't happen. I even gave a seminar on foreclosures with a Florida judge that the judge said that she did not seen any deficiency judgment requests.
In the earlier article I showed a Motion for Deficiency Judgment from First Bank. First Bank is big in Colorado and was a national lender, but it is not as big as the lender that filed the latest deficiency judgment that came into my office - Wells Fargo.
Now some explanation - Wells Fargo is not the owner of the note in this most recent deficiency judgment case - it is FANNIE MAE.
Fannie Mae released news late last month that it would take certain action on borrowers that walked from their properties in strategic defaults, one of the actions being they would blacklist the borrower for future loans for 7 years. Filing for a deficiency judgment is the next action it will take. Its announcement on June 23rd said, "Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments".
This announcement makes the call that many have been making to distressed homeowners only more important - DON'T PUT YOUR HEAD IN THE SAND THINKING THIS WILL ALL PASS TOMORROW - BECOME INVOLVED IN A SOLUTION TO YOUR PROBLEM -
Distressed borrowers should call their lender - or better yet - speak to a knowledgeable real estate attorney that looks for solutions (if the real estate or other attorney is all about keeping you in your house by dragging out the foreclosure, you are not speaking to an attorney looking to find a solution for you!
Copyright 2010 Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 begin_of_the_skype_highlighting 561 689 6660 end_of_the_skype_highlighting RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
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