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Countrywide Short Sale Approval Letter

By
Real Estate Agent with Keller Williams Realty

I have been doing Countrywide short sales since 2007 and this is the first time that Countrywide is putting this verbiage in the letter:

"Countywide and/or it's investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreeed otherwise or prohibited by law, if the short sale closes on the loan referenced above.  In addition, if this loan is covered by mortgage insurance, the mortgage insurance company may reserve the right to purse the seller for deficiency based on the terms of the mortgage insurance policy.  Furthermore, there may be tax consequences associated with entering into a short sale."

The negotiator  says that the bank will most likely issue 1099 but he can't remove this verbiage.  He says that it's a new letter that Countrywide is using. 

I'm assuming that Countrywide is doing this for few reasons including trying to prevent people dumping their investment property and so forth.  We're asking for an attorney's response but meanwhile anyone have any insight?   TIA.  Here's the letter.  

Countrywide Short Sale Letter

Comments (5)

Jim McNinch
Trademark Loss Mitigation - Spring, TX
Short Sale Specialist, Texas

Thanks for the update Simon.

We've been doing short sales for a number of years and have seen more changes from lenders during the past 6 months or so than we have for the past six years.  I rember my first short sale with Countrywide.  Made the initial contact with the seller, conducted the short sale and close all in 29 days.  Ahh, "the good 'ole days".

Historically, few of our clients ever received a 1099 or any note or judgment from Countrywide, unless agreed as part of the short sale negotiations.  I know several agents that will no longer work with Countrywide as a result of the difficulty and time involved in the short sale process.

Mar 05, 2009 08:41 AM
Travis Duncan
Aloha Properties of the Carolinas - Charlotte, NC - Charlotte, NC

This just started popping up in their approval letters. We have had success with proving to the bank that the homeowner has no way of paying back a deficiency or promissory note. Another tact you can take is see if they will drop the verbage if the seller ups their price a few thousand. Remember it's all in the negotiations, ie. Countrywide's net on the HUD!

Mar 06, 2009 11:51 AM
Anonymous
Gwen

I'm a realtor, just completed a short sale with Countrywide (a looooong and difficult one).  The approval letter I received does not include the language posted here.  Letter was sent in March of 2009.

Mar 25, 2009 02:41 PM
#3
Anonymous
Susan

It's April 23 and I am 3 days away from closing on a short sale for an investment property I own in Florida. This "may pursue a deficiency judgement" verbiage is on my approval letter and my short sale negotiator says they will not remove it. This short sale has been in negoitations for 6 months and I don't want it to fall apart for the sake of the buyer and agents however....I'm also being told by my short sale negotiator that Florida law says if I foreclose they can still pursue a difficiency. It appears I'm screwed either way.

Does anyone have a Floriday Real Estate Laywer's opinion on this?

Thanks!

Apr 22, 2009 01:44 PM
#4
Anonymous
BRYAN

In Florida, they have six months I'm told to seek the deficiency.  Not sure if this is true - but I was told after six months they cannot file for deficiency.

May 29, 2009 03:15 PM
#5