Two years ago a short sale was performed with a BB&T first lien only.  Mortgage balance was 2.2 million.  Short sale price was 1,925,000.00  BB & T accepted the wire and funds in 2010.  No short sale letter was produced.  Deed of Trust was released.  2 years later they are pursuing 500k difeiciency from the Seller noting that they released the Deed of Trust but not the note.  I was not involved in the transaction but have been asked my opinion by legal counsel on how short sale terms are agreed to at time of settlement.  Opinins?  Do you feel the bank has the right to pursue the balance after accepting the funds with no clear written terms to the Seller?  This is a Maryland case.

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Scary, seller should have never settled or closed the transaction without clear written, approved and signed terms from lien holder!

If they waived the deficiency it will be stated in the approval letter. If it wasn't then if your state allows it the lender can go after a deficiency judgment.

The lender has every right to go after the borrower unless they agreed in writing to not do so.

Ditto.  Unless the borrower has an agreement that Specifically waives the deficiency or forgives the balance, the bank has every right to collect.  This assumes Maryland is not a Non Recourse state.

How Does a title co. do a short sale closing, and disburse funds in a short pay transaction, without an approval letter?

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