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CHASE WANTS TO GIVE SELLER A DEFICIENCY JUDGMENT

Posted by MESARE DONDA on August 5, 2011 at 9:06am in Short Sale Discussions
One of our clients has a Chase 80/20.  Chase approved a regular short sale but is expressly asking seller to agree that there will be a deficiency judgment.  Any suggestions as what to do?  Seller won't sign if there is a deficiency (because doesn't want to file for bankruptcy to get rid of it...)  Thank you

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  • Yuri Ramirez November 1, 2011 at 7:40am

    i had this happen recently, and all it took was a phone call to chase to explain that in california that is illegal. this is an anti-deficiency state...they also tried to collect a cash contribution of $500 from seller but when i called they realized that it was illegal to request that in this state as well. managers seem to get it, negotiators sometimes do not so best advice is go straight to management.

  • Kathleen Jamal August 7, 2011 at 5:02am

    A deficiency or not is the investor that owns the mortgage loans demand.  The seller should be encouraged to write a letter re: why they can't financially afford to be responsible for the  entire deficency and counter offer a partial repayment with affordable payments and zero interest and see what they say.  Also, some investors do not have a divison of their company to pursue these "deficiencies" so I've also been aware of the seller really never hearing from them again.  But, I wouldn't bet on that.

     

    Kathleen Jamal

    Operations Manager

    The Law Offices of Robert C. Russell, P.C.

  • Rosemary Brooks August 7, 2011 at 1:25am
    In California SB 458 should protect homeowners that do a short sale from this type of "want" from the lenders.
  • Bryant Tutas August 7, 2011 at 12:30am
    going out in the newsletter today
  • Bryant Tutas August 6, 2011 at 7:50am

    Mesare. They come form Short Sale Superstars. Check you spam folder tomorrow in the morning if you don't receive it.

     

    The older ones are here

  • MESARE DONDA August 6, 2011 at 7:17am

    Great, guys... Will keep fighting... Seller will probably be OK with the $500... better than a bankruptcy that will stay for 10 years!

    Bryant, who does the newsletter come from (what address?). How can we get the older issues?

  • Richard August 6, 2011 at 2:00am

    I don't know all the deatils and how many dollars are involved, however it looks like Chase is willing to let this short sale proceed.  Given the seller's alternatives and based on the circumstances, I feel the options are pretty good for the seller. 

     

    If the seller can't get a modification or, if it goes to foreclosure, then a small contribution or even small deficiency judgement all of sudden doesn't look so bad, right?

  • Wendy Martin August 6, 2011 at 1:12am
    In a few cases, $500 has sufficed.  Small price to pay (if the seller has it) for full settlement language.  So many times lenders/servicers have asked for the world, 5k AND a 20-30k promissory note (and not only from folks with some $$). $500-1,000 has worked 9 out of ten times.

    MESARE DONDA said:
    Oh, Wendy... and how much is a "small contribution"...???
  • Bryant Tutas August 6, 2011 at 1:08am

    Mesare. It basically means they may or may not contact the borrower after closing to make some arrangements for the balance owed. At that time they can certainly try and negotiate a settlement if they are able. Usually the lender is using this wording because the borrower has inco9me and assets that would justify some sort of contribution on their part. OR it could just be a requirement from the investor to leave that language in the approval. Unless the borrower has high income and assets the chances of the lender going in front of a judge to get a judgment are probably slim to none.

     

    Short sale superstars sends out a newsletter every Sunday morning. It goes out to all of our members. If you are not receiving it you may need to check your email settings to make sure you are set to receive emails form the network.

  • DoesntMatter August 5, 2011 at 4:08pm
    Why not agree to the deficiency? Would you rather be pursued for a fraction, or the full balance if you dont resolve the loan?
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