The Push back has started. The lenders Bank of America in particular are known for Leaving the possibility of going after a deficiency judgment in Washington State. True Washington State is a non recourse state. That means the foreclosing lender can not go after you for the default. That does not hold true on a short sale and it makes no sense for lenders to request a deficiency unless it's a 2nd lien holder. But they do. This causes many short sales to fail. What we are seeing is lenders will simply state the short sale is for a lien release only and sometimes not even mention the possibility of the default which could come back to haunt the seller. I suspect that many RE agents don't know the difference or ignore it hoping it goes away. I typically will give my opinion then send them to a real estate attorney for advice on a short sale approve letter. California is about to change the game with SB 1178, http://budurl.com/casb1178 Once this passes, and it will, you will see other states and hopefully Washington State follow suit. With almost 25% of homeowners under water on their mortgages you will see a rise in strategic short sales as sellers will not have to worry about a deficiency judgement. Short Sales will be around for years to come. Mike Karsten is a Real Estate Short Sale Expert.
Comments(0)