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In the recent past, it was highly unlikely, in fact there was a law passed under our last president that prevented that very thing from happening.
That ship has sailed... the grace is expired. Banks can and do reserve the right to go after a borrower for a judgement for their monies lost...
Thinking about buying a home? Search Sherman Oaks Homes
So now what? There is right concern that banks will ask for a promissory note or the like when completing a short sale. This happens, and it is one of the best practices I've found that when considering the handling of a potential short sale that the borrower be aware of this possibility. True that it happens infrequently, yet the time for discussion is not after three, four or five months of hard negotiating and the bank's desired closing date is looming.
The good news for Sherman Oaks Short Sales, and indeed most of the country, is that if there has been a legitimate hardship, and the funds are not available to pay off the lien, most lenders are accepting the loss as part of doing business in this age. There has been such a flood of foreclosures that banks are more willing to save a few thousand, and in many cases, five and six figure thousands, to short sale a home rather than see it go to foreclosure.
Any good manager in the loss mitigation department knows this to be true and therefore knows that it is in his bank's best interest to settle up and avoid the courthouse steps sale.
No one wins in a foreclosure... except maybe a cash investor.... and then only rarely....
Thinking about a short sale?
Write me with questions or give me a quick call.
Peace to you and yours,
V
