Need Help from Active Rain Community regarding Judgements on a seller when doing a short sale

Real Estate Agent with Realty ONE Group

Well, we all know how difficult short sales are. I am representing a buyer and we have finally gotten an approval from the bank. Yay! But, wait, we just got the title report and there is a judgement on the seller for over $150,000! What???

So, here are the details. It was filed in 2005. He purchased the house my buyer is trying to buy in 2007. How did he buy this house? Secondly, it was re-filed in May 2010. The house is worth well below the amount of the judgement. If he can't get the judgement taken off then he will just go to foreclosure.

My question out there to anyone who might have experienced this or have some advice on the subject is:

1)The person who filed the judgement won't get any money from the short sale since there will be no profit, correct?

2) So if he can't short sale the house then he will just foreclose and the person who filed the judgement still won't get any money, correct? It really is punishing the buyer not the seller. The seller has no money and it will just stick with him still.

I see no reason why the person who filed the judgement wouldn't just let that go and keep it with the seller instead of the house. Do any of you think I am off base?

I also read somewhere that if the judgement was filed before the 1st mortgage then they are entitled to the money not the 1st mortgage bank. Any idea if this is correct? If so, then my whole theory is blown because they would get the money. In that case he would just foreclose I suppose.


Posted by

Betsie Melter, REALTOR, GRI, ABR

Realty ONE Group

3530 S. Val Vista Dr. #114 Gilbert, AZ 85297



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Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

This deal is most likely  dead. .

If I was the $150K guy I wouldn't release the judgment for the reasons you listed. . 

If the seller owes me that much, I'm to making him pay one way or another. . .and if it forecloses, I just move the judgment to anything else he would buy in the future.

The listing agent should have done a title check from the beginning . . because of that lack of action . . . you all were sucked in to lose at the end.


By knowing this before hand, he could've negotiated with them to remove the lien in exchange of a partial payment. . . like $10,000 as an example

But you can't do that now because the approval does have a a penny to share with this individual. .unless the seller wants to pay it. .highly doubtful


My advice:

You did not lose anything.. gratification for you is just extended. . .help them find another house and leave it at that. . 


Good luck, 


Nov 12, 2010 06:42 AM #1
Betsie Melter
Realty ONE Group - Chandler, AZ

Thanks. But if he goes to foreclosure the guy who filed the judgement doesn't get anything anyway and it still stays with the seller so it will come up in the future. At that point don't you think it is worth a shot?

Nov 12, 2010 06:52 AM #2
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