Question about Citi/HUD Short Sale

I have a short sale approval from Citi on a FHA loan, all we're waiting for is my signature to complete the deal.  I'm very concerned about deficiency and would like some guidance.  Citi says they won't pursue deficiency (in email), but won't guarantee HUD won't pursue it.  I've seen HUD letter 2008-43 which states that if a short sale is not completed, a deficiency will not be pursued, however I don't see anywhere in the document that deficiency would not be pursued in the event that a short sale is successful.  My attorney says that because that specific language is not in there, that the door is open for HUD to pursue deficiency on the note.  Is this true?  Is there any way to get guarantee that HUD will not pursue deficiency?

 

Thanks!

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Replies to This Discussion

Permalink Reply by Vanessa Calhoun on September 9, 2010 at 8:26am
Are you in the FHA Pre-Foreclosure Sales Program?
Permalink Reply by Adam on September 9, 2010 at 8:28am
Yes, I have the HUD form 90045 approval letter and have returned it, signed.

Vanessa Calhoun said:
Are you in the FHA Pre-Foreclosure Sales Program?
Permalink Reply by John Edelman on September 9, 2010 at 12:45pm
Per the PFS guidelines - page 15 section P - it says that mortgagors, acting in good faith, who successfully sell their properties using this option are relieved of their mortgage obligation and are entitled to ........ This means there is no deficiency if the short sale is successful using the PFS program.
Permalink Reply by Adam on September 9, 2010 at 12:53pm
The attorney I spoke with interpreted this as leaving the door open since it says it does release the mortgage obligation but not the note obligation. His argument is that there are two completely separate entities. The trust deed (mortgage) is relieved by this statement, but not the note. That's what scares me a whole lot.

John Edelman said:
Per the PFS guidelines - page 15 section P - it says that mortgagors, acting in good faith, who successfully sell their properties using this option are relieved of their mortgage obligation and are entitled to ........ This means there is no deficiency if the short sale is successful using the PFS program.

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