Replies to This Discussion

Permalink Reply by Jeff Payne on August 31, 2010 at 6:43am

I am in Florida and none of mine have, yet. That goes back to over 3 years of short sales

Permalink Reply by Kent Dills on August 31, 2010 at 7:05am

Hey Alisa, you know I'm in Texas and none of the 25 clients I have helped in the last 18 months have gotten a D.J. that I know of - and I pretty sure I would have heard about it too! ;-)

Permalink Reply by Alisa Martin Pepper on August 31, 2010 at 7:18am

I have been doing it short sales for about 2 years and none of my clients have yet either. From what I understand, the lienholder has 4 years to sue for deficiency.

Permalink Reply by Ben Benita on August 31, 2010 at 9:12am

I have NEVER heard of anyone being actually sued for the deficiency, and, from the higher ups I have asked about this, EVERY ONE OF THEM HAS SAID:

"...FAT CHANCE.....think about it logistically. We have tens of thousands of homeowners we COULD sue, but, in order to be successful in this, we need to hire attorneys to track down the Sellers, find out where they live, find out IF they have the FULL AMOUNT OWED TO US (they can only sue once), and if so, we must notify them of our intentions, take them to court, hope to win a judgment, then TRY to collect.....at ANY point in this process the Seller could declare bankruptcy, transfer or hide assets etc."

They have ALL said the odds of anyone actually being pursued is VERY low, and, that this is used more as a "scare tactic" to spook Sellers (and agents) into bringing more cash to the table in order to "buy out" the deficiency.....

And as we all know....IT WORKS!!!

You would not be writing here if you were not concerend!!!

;-)

Remember guys -- banks have teams of attorneys working 80 hours per work to do EVERYTHING they can to get as much cash for their Investors as possible.....that is what we are ALL up against!!!!

Permalink Reply by sherry on August 31, 2010 at 3:01pm

Ben - I wish this was a post that was posted about 2 months ago. My seller signed a 15K promissory note to settle in full without pursing a judgment of approx $120K. I guess it was worth it for him having a piece of mind. Nice post

Permalink Reply by William C. Black on September 16, 2010 at 5:51pm

We are a law firm that currently has over 80 short sales under management. In the last 6 months we have found two small local credit unions are starting to go after deficiencies on cash out 2nds immediately after the close of the short sale. Washington State has up to 6 years from initial default in order to get a judgement- if the Judgement is granted they have 10 years to collect plus another 10 years possible extension.

I interviewed a collection company last week and they stated they are getting more and more 2nd lien deficiencies on a daily basis from US Bank as well as credit unions. Interestingly he also stated the ones they are pursuing are the clients that are still maintaining other forms of credit cards with available credit on them as well as a time share, RV loan, etc.

He also stated that they put a "grade" on the profession of the debtor. A chemical engineer has a much greater success of return then a person that worked at Walmart therefore he admitted they can "cherry pick" the debts they pursue.

I would caution anyone that says because it has not happened in the past it will not happen in the future... I am not sure if anyone ever knew about Verizon when they took over many companies through mergers and acquisitions that include Bell Atlantic, MCI, Nynex, GTE and other companies. They had a HUGE list of outstanding receivables. They "outsourced" the collections on these and the company was AFNI which strategically had credit reporting agency pool all people that ever lived in the residence that owes a bill.... then request to be notified when a credit report was pulled for a loan mortgage inquiry- they would then slap on a collection on the person. Only to require all communication through FAX. Even though the acquired companies no longer exist, Afni insists the debts have survived intact some as old as 10 years.
Read more: http://www.consumeraffairs.com/news04/2008/04/afni.html#ixzz0zl6xcjnS

Bill Black CDPE, CMP
Business Development
The Law Office of Robert C. Russell
NW Loan Modification Center www.nwlmc.com
NW Short Sale Network www.nwssn.com
360-89NWLMC (360-896-9562)

Permalink Reply by Kimberley Kelly on September 17, 2010 at 2:00am

Interesting about the "cash out seconds" which is so common here in California with Short Sales. Most of my Short Sale clients do end up contributing something to remove the Bank's right to pursue for deficiencies in the future, and the peace of mind is worth it to them..even knowing they most likely will NOT pursue. I also firmly believe that IF someone is going to be pursued in the future, it is going to be those someones with assets. Sellers need to be aware of this and handle it accordingly. CPA's and real estate Attorneys can help them with this..

Permalink Reply by sherry on September 17, 2010 at 2:55am

Thanks for posting this William.

Permalink Reply by Robin M. Willis on September 17, 2010 at 7:54am

William,

Thank you for your information on this. Even though the bank is likely not to, I anticipate that as the economy improves and people have more resources the banks will start exercising their option. Arizona attorneys are telling my clients that the bank has 7 years to pursue the deficiency after the short sale.

William C. Black said:

We are a law firm that currently has over 80 short sales under management. In the last 6 months we have found two small local credit unions are starting to go after deficiencies on cash out 2nds immediately after the close of the short sale. Washington State has up to 6 years from initial default in order to get a judgement- if the Judgement is granted they have 10 years to collect plus another 10 years possible extension.

I interviewed a collection company last week and they stated they are getting more and more 2nd lien deficiencies on a daily basis from US Bank as well as credit unions. Interestingly he also stated the ones they are pursuing are the clients that are still maintaining other forms of credit cards with available credit on them as well as a time share, RV loan, etc.

He also stated that they put a "grade" on the profession of the debtor. A chemical engineer has a much greater success of return then a person that worked at Walmart therefore he admitted they can "cherry pick" the debts they pursue.

I would caution anyone that says because it has not happened in the past it will not happen in the future... I am not sure if anyone ever knew about Verizon when they took over many companies through mergers and acquisitions that include Bell Atlantic, MCI, Nynex, GTE and other companies. They had a HUGE list of outstanding receivables. They "outsourced" the collections on these and the company was AFNI which strategically had credit reporting agency pool all people that ever lived in the residence that owes a bill.... then request to be notified when a credit report was pulled for a loan mortgage inquiry- they would then slap on a collection on the person. Only to require all communication through FAX. Even though the acquired companies no longer exist, Afni insists the debts have survived intact some as old as 10 years.
Read more: http://www.consumeraffairs.com/news04/2008/04/afni.html#ixzz0zl6xcjnS

Bill Black CDPE, CMP
Business Development
The Law Office of Robert C. Russell
NW Loan Modification Center www.nwlmc.com
NW Short Sale Network www.nwssn.com
360-89NWLMC (360-896-9562)