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Aurora Financial Short Sale Question

Posted by Steve Maxson on April 5, 2011 at 12:52am in Short Sale Discussions

Has anyone on the site executed a short sale with Aurora? I have an approval for a short sale from Aurora but my concern is they will not put specific and direct language in the contract that relieves me of the loan deficiency (unpaid balance) despite my lawyer requesting such.  My lawyer states that the language in their standard template does not relieve me of the unpaid balance and this legally leaves the option open for Aurora to pursue the deficiency for up to 5 years.   Has anyone encountered the same concern or has Aurora (or a cerditor) pursued repayment on the deficiency?

 

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Replies

  • Aaron Ayotte, Short Sale Monkey April 8, 2011 at 6:07am

    We have closed several with Aurora. 

    You're right, they don't have specific deficiency waiver language, however, look for a statement such as, "If the short payoff amount is remitted to us, Aurora Loan Services will: File a 1099-C form with the IRS and send you a copy....."  They can EITHER file a 1099 OR pursue a deficiency, NOT BOTH.  If the language says, "MAY file a 1099..." there's some risk, but very little.  Bottom line is the deficiency pursuit is expensive and has little chance of success, especially in instances where it's VERY clear that the seller has no money and doesn't have a "high earnings potential".

  • Heidi White, CDPE, San Diego April 7, 2011 at 5:20am
    Just because Aurora may not persue the deficiency balance themselves - doesn't mean they won't sell off a portfolio of unsecured debts to a debt-buyer (i.e. Collection Agency)...
  • Mary Tyson April 6, 2011 at 11:00am
    H Steve, Not at this point.
  • Steve Maxson April 6, 2011 at 10:36am

    Hi Mary - but do you know of any instance where Aurora has later pursued the balance or deficiency of the loan, or sold it to a creditor who pursued?

     

    Steve   

    Mary Tyson said:

    That is correct...Aurora will not put that specific language in their approval letters. It has been this way for the last couple of years.
  • Mary Tyson April 6, 2011 at 10:32am
    That is correct...Aurora will not put that specific language in their approval letters. It has been this way for the last couple of years.
  • Steve Maxson April 5, 2011 at 2:17am


    Steve Maxson said:
    The property is in Florida.  My lawyer spoke directly with the Aurora negotiator and his supervisor on more than one occasion and they said they do not put that language or change the standard contract for anyone.  They said they have done over 3,000 short sales sales and heve never pursued a deficiency, and that is not in the banks interest.  The stated the only shoirt sale approval they give in writing that the deficiency will notbe pursued is HAFA short sales and this loan is not HAFA.  Is the short sale your working on a HAFA loan?
  • Steve Maxson April 5, 2011 at 2:17am
    The property is in Florida.  My lawyer spoke directly with the Aurora negotiator and his supervisor on more than one occasion and they said they do not put that language or change the standard contract for anyone.  They said they have done over 3,000 short sales sales and heve never pursued a deficiency, and that is not in the banks interest.  The stated the only shoirt sale approval they give in writing that the deficiency will notbe pursued is HAFA short sales and this loan is not HAFA.  Is the short sale your working on a HAFA loan?
  • Kimberley Kelly April 5, 2011 at 1:51am
    You must not be in California or it must not be a primary Res?  You MUST get the deficiency language into the acceptance letter..if not, what's the point of a Short Sale?  I'm doing a HAFA short Sale with Aurora right now and they've been fantastic..tell your lawyer to keep pushing. 
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