Co-Signor concern if do a Short Sale question.........................

I have a client who co-signed on a loan with his son with Wells Fargo. They purchased with FHA financing. The client lives in Nevada and is retired. He has about $700K in retirement funds and is concerned the bank will require him to utilize to make up for the deficiency.

He also owns his home in Nevada and is concerned that if the bank does not waive the deficiency in the short sale process that they will record or tie the lien against his property.

I told him to talk to an attorney and he did only to find out that these are genuine concerns.

What I would like to know is if anyone has done a short sale with a co-signor involved and got the deal done? If so, how was the deficiency addressed in the short sale approval letter?

0 members like this

Replies to This Discussion

Permalink Reply by Corinn on January 29, 2013 at 3:59am

Sheila, we had a file such as this...BofA and FHA...the co-signer was not required to contribute any funds and the deficiency was forgiven. I don't know if it will go the same way for you, but thought I would let you know my story.

Permalink Reply by Patrick James on January 29, 2013 at 4:08am

Refer the client to mortgagee letter 2008-43 ----- it states in there that if the homeowner is accepted into the PFSP that as long as they participate in the program in good faith neither HUD or the mortgagee will pursue the homeowner for a deficiency.

Permalink Reply by Jen Hill on January 29, 2013 at 4:28am

Hi Sheila, yep, been there, done that. Same situation with a father and son, and it was also an FHA with Wells. The short sale went well. They did require separate financials, hardship letters, pay stubs, etc from both gentlemen since they are both responsible for the loan. In the end, since it was an FHA loan, the deficiency was automatically waived. The deficiency is not stated in the approval letter from Wells, but it is part of the benefit of completing an FHA Pre-Foreclosure Sale so verbiage is not necessary. Not certain about the lien on the other home but if I'm not mistaken, the banks cannot go after someone's retirement. Good luck!

Permalink Reply by Pattilynn Guilford on January 29, 2013 at 5:46am

Perhaps the should Quit Claim deed his title interest to the son?

Permalink Reply by TOP END Properties on February 3, 2013 at 4:57pm

You should ALWAYS get a waiver of deficiency.

RSS

Welcome to
Short Sale Superstars

Sign Up
or Sign In

Or sign in with:

Members

View All

Badges | Report an Issue | Terms of Service

Short Sale Superstars, LLC and www.ShortSaleSuperstars.com does not endorse the real estate agents, loan officers, attorneys, real estate brokers and other participants listed on this site. These real estate profiles, blogs, blog entries and forums are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a short sale. Short Sale Superstars, LLC takes no responsibility for the content on these pages that are written by the members of this community.