Chase Deficiency

We are getting ready to close on the sale of on my personal Chase short sale in California. One loan, which was a refinance, with no cash out, second home. The approval did not mention anything about a deficiency judgement, one way or the other. I am asking my agent to get something in writing from the negotiator. Any new thoughts or experiences with this?

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Permalink Reply by Jeff Payne on July 15, 2011 at 4:31am
Harry, good stuff here,  I wish Florida would follow California and offer this type of information to us. 
Permalink Reply by Kimberley Kelly on July 15, 2011 at 6:27am
Harry is right, but re-read that approval letter.  Sometimes it's hidden in the lingo.  Chase is stubborn like bull..so don't expect them to change a thing.  However, the List Agent can usually push them a bit if they know the Seller is willing to foreclose..and many in CA. are as this is a non-judicial state. 
Permalink Reply by T Arnold on July 15, 2011 at 6:54am

Thank you for your help. I was familiar with the Senate Bill 931 B, and thought they would have to comply. The only verbiage  after reading the approval a number of times is: If the final closing instructions are not followed in their entirety, the lien will not be satisfied, and the proceeds check will be returned. It also read:  the short sale will be reported to various credit reporting agencies and may have an adverse effect on the Seller's credit, as well as tax implications.

Permalink Reply by Bryant Tutas on July 17, 2011 at 12:34am
This is going out in the newsletter today
Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 17, 2011 at 2:38am

GBL2123,

 

The same situation occurred in Tamarack Lodge in Idaho - a newly developed ski / year-round resort.  The entire resort filed BK and as a result all of the homes became worthless - even the sole Real Estate Brokerage went BK.  A former client in CA also owned there and tried a short sale BUT all of the banks knew of the issues and will not approve short sales in the area.  They are foreclosing on pretty much everything.

 

Good luck with yours, sounds similar....

 



GBL2123! said:

Harry, do you have the laws for short sale deficiency on an non owner occupied investment property in Ilinois? In my case, it is a investment condo/hotel in a waterpark where the operator of the waterpark filed chapter 11. The values have fallen from a purchase price of $280K, 5 years ago to $50K today. They are still open, barely. The loan is still current tho. Just listed it for $55K. 
Permalink Reply by Jim McCormack on July 17, 2011 at 4:51am
Find out if Fannie Mae or Freddie Mac owns the loan.  According to information I received from both, they do not pursue deficiency judgments in short sales where there is no fraud.  I have an email from Freddie Mac's legal department stating that.  Fannie Mae reps have told me this verbally.  However, if you have mortgage insurance than the MI company would still retain the right to pursue you for the deficiency via subrogation.
Permalink Reply by Chris McGee on July 17, 2011 at 5:29am

Jim, I'd love to have a copy of that email from F Mac?



Jim McCormack said:

Find out if Fannie Mae or Freddie Mac owns the loan.  According to information I received from both, they do not pursue deficiency judgments in short sales where there is no fraud.  I have an email from Freddie Mac's legal department stating that.  Fannie Mae reps have told me this verbally.  However, if you have mortgage insurance than the MI company would still retain the right to pursue you for the deficiency via subrogation.
Permalink Reply by Nathan Miller on July 17, 2011 at 5:32am
The CAR chart is terrible since it compares to judicial foreclosure and nearly all foreclosures in CA are non-judicial.
Permalink Reply by Dominique Van Ryckeghem on July 17, 2011 at 6:01am

You would think banks would give care about issuing state specific short sale approval letters but they don't.

Senate Bill 931 has got you covered.

T Arnold said:

Thank you for your help. I was familiar with the Senate Bill 931 B, and thought they would have to comply. The only verbiage  after reading the approval a number of times is: If the final closing instructions are not followed in their entirety, the lien will not be satisfied, and the proceeds check will be returned. It also read:  the short sale will be reported to various credit reporting agencies and may have an adverse effect on the Seller's credit, as well as tax implications.

Permalink Reply by Stephen B. McWilliam on July 17, 2011 at 9:04am
Section 580e has been added to the California Code of Civil Procedure, effective January 1, 2011, which prohibits banks holding a first mortgage from approving a short sale and then pursuing the seller for a deficiency. SB 931, which was signed into law on September 30, 2010, makes lenders accept the short sale proceeds as payment in full for a first mortgage secured by one to four units, providing the lender approves the short sale.
Permalink Reply by Fred Price on July 17, 2011 at 11:48am
I would agree that you need something in writing...The Heathrow Group
Permalink Reply by Fred Price on July 17, 2011 at 11:50am
I would agree that you need something in writing, especially with it being a second home...The Heathrow Group

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