Replies to This Discussion

Permalink Reply by Michael Hayley on October 13, 2010 at 6:43am

I've not experienced success getting a lender to change an Approval Letter to be clear about a deficiency issue (but I always try). I have had success using the following strategy: send a reply letter accepting the terms with a statement: Just to be clear with our understanding of these terms, we accept the terms and conditions of the short sale in your Approval Letter dated XX/XX/XXXX on the assumption that the Note is "satisfied and paid in full". There is to be no deficiency liability. If this assumption is not correct, please notify me within 1-business day from your receipt of this email/letter.

I am very interested in hearing other opinions on the forum about this.

Permalink Reply by Robin M. Willis on October 13, 2010 at 8:36am

If there is no language completely releasing this mortgage then you can bet they are going to reserve their right to pursue the deficiency if allowed by law in your state. If you are unable to get them to add appropriate language to protect yourself financially, then you would be wise to hire an attorney to help you.

When a seller gets a short sale approval, it is easy to get excited and just blaze forward. However, NOW is the only time you have to negotiate these terms. If you move forward to close this transaction, you will be stuck with whatever is in the approval letter. I have found that banks respond most favorably when there is an attorney involved, unfortunately.

P.S. Congrats on the super fast approval!

Permalink Reply by meme on October 13, 2010 at 9:16am

ok, so we spoke to chase. in short they stated they will not add verbiage to our short sale approval that the deficiency will be waived or in form of a 1099c.

i can not accept this short sale approval letter as is since it's so loose and open. in short, they want 1800 @ closing from me and it's wide open with no verbiage stating they will or will not proceed with a deficiency judgment.

At this point, does an attorney need to step in and negotiate the terms?

What gets me is that I have a pre approved buyer ready to go, either give me the 1099c or i walk and you can foreclose... We have been preparing for bankruptcy as a last resort so IMO Chase should take what they can get now.

Permalink Reply by James Lockard on October 13, 2010 at 9:19am

From what I have seen if Chase gets a contribution from the seller they usually do not pursue deficiency judgement. Tell them no contribution unless they add they will not pursue the judgement. In my opinion, all if it is just a bunch of BS, as long as they get thier bottom line number they do not care where it comes from. Find out he bottom line.

Permalink Reply by Robin M. Willis on October 13, 2010 at 9:22am

Yes, now is the time to get the attorney to step in and make SURE the bank knows you are preparing to file bankruptcy if necessary. Good luck and please let us know how it turns out. :-)

stingfish said:

ok, so we spoke to chase. in short they stated they will not add verbiage to our short sale approval that the deficiency will be waived or in form of a 1099c.

i can not accept this short sale approval letter as is since it's so loose and open. in short, they want 1800 @ closing from me and it's wide open with no verbiage stating they will or will not proceed with a deficiency judgment.

At this point, does an attorney need to step in and negotiate the terms?

What gets me is that I have a pre approved buyer ready to go, either give me the 1099c or i walk and you can foreclose... We have been preparing for bankruptcy as a last resort so IMO Chase should take what they can get now.

Permalink Reply by meme on October 13, 2010 at 9:28am

Thanks all. I will certainly keep you all updated.

So my goal now is to get this number and attempt to settle depending if its reasonable to me. worst case, they foreclose, auction the house for less then what my buyer was offering, issue a judgment and i file for BK. The second house we purchased is our dream home so i'm not worried about not being able to buy another house in the near future, i just want to cut my ties and start rebuilding my credit.

I am trying to play the game right and go through the short sale process but i would be a fool to not CYA by accepting their first approval. Especially if i have nothing to loose. is my strategy out of line?

Permalink Reply by Robin M. Willis on October 13, 2010 at 10:04am

Your strategy is right on target and you have the attitude necessary to be able to negotiate effectively with your bank. :-)

stingfish said:

Thanks all. I will certainly keep you all updated.

So my goal now is to get this number and attempt to settle depending if its reasonable to me. worst case, they foreclose, auction the house for less then what my buyer was offering, issue a judgment and i file for BK. The second house we purchased is our dream home so i'm not worried about not being able to buy another house in the near future, i just want to cut my ties and start rebuilding my credit.

I am trying to play the game right and go through the short sale process but i would be a fool to not CYA by accepting their first approval. Especially if i have nothing to loose. is my strategy out of line?

Permalink Reply by meme on October 14, 2010 at 12:51am

Hey gang,

Here is a snapshot of the approval letter i received. Note the highlighted text... To me, this seems wide open... do you all agree. It does not tell me that they will issue a 1099c, nor does it tell me they will not.

the deficiency is around 98K

please help me confirm.
1. either they will issue a 1099c
2. OR... they will try to sue me for the difference.

question, what makes chase decide which one to go after? and how can i get them to go with the 1099c? does anyone have any tactics i can use?

ramping up for round2 today.

screenshot of approval here...

Permalink Reply by meme on October 14, 2010 at 1:18am

another thought.

IF the deficiency is 98K... what is the amount banks can right off in terms of a loss? i understand some are backed by the feds and received bailouts etc but would chase be able to right off 98k on this loan? i'm wondering if there is only a certain amount they can right off and if i can fill that difference perhaps they could issue the 1099c.

are these points i should bring into discussion with chase during our talks?

i'm afraid of signing this as is as they may sue me for the deficiency rather then issue the 1099c... thoughts?

Permalink Reply by meme on October 15, 2010 at 7:53am

chase did call my agent and when he asked what will it take to have chase waive the deficiency he said i would need to bring 20K to closing!!!!

i owe 300k, they approved the sale at 195k so my deficiency is around say 100k... 20k is more than 10%!!!

so we went back and i offered 10k in a promissory note, no response.

so... i have an attorney now. ive sent my chase negotiator an email followed by a vmail to try to schedule a call at 3:30 today. that was this morning, so far no response and no call back. i have a suspicion he will not be available for our call. time is sensitive at this point since im trying to make this happen for the nov 15th closing.

i really want to work with them on this so they get something!

Permalink Reply by Molly G on October 15, 2010 at 11:48am

Good for you on a fast approval but just watch Chase. I also tried a short sale with them and was rejected because I flat out refused to sign a promissory note. The deficiency total was $55k and they wanted a $60k promissory note (w/ a $5k profit for them). I said No, my agent said No are you crazy so they closed the file. I was willing to hand the keys over (I nearly sent them in) and now I'm going to fight like it's my last meal before a 40 day fast to not let them get it back. We did all the fancy escalation to Chase Execs mentioned on this site but happened to lose the battle. So we are heading to foreclosure (or with the mess we have now who knows when it will be processed... darn that was just upsetting news to get this week : ) ). Probably not the confidence you needed but sounds like you are very much in the game, I had one nasty supervisor manager... but stand up to them and don't let 'em get to you. Let your realtor/attorney handle them (I don't recommend as a seller talking to them, they will pound you... trust me they are trained vultures). "We're here to help" should have" put a lot more earnings in our employees bonus checks". Sure, I'll sign a promissory note for that ridiculous amount if first you are willing to purchase this $5 bill from me for $200k. The sellers are really the victims here in this crisis. It stinks but if you don't stand up for yourself and your family then no one will. Chase is a bully... just seeing who they can steal some lunch money from. I'm cheering for you and anyone who's going through this - it's a tough time. Their $20k is purely a scare tactic just hang in there, if they know they'll get $10k they won't let that go... especially with folks like me telling them to stick it. It's a game just keep your fish on it's hook and reel her in. Best of luck!

Permalink Reply by Emily Wise on October 17, 2010 at 1:21pm

It's a bit late for you on this one, but we always have an addendum to the Sale and Purchase Contract stating "This contract is subject to a paid in full acceptance by all lien holders." or similar

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