Hi All,

Has anyone else received a Borrower Acknowledgment Letter with their Chase short sale approval?  This is the second time I've gotten one that the borrower needs to sign and it states :  "By signing below, the debtor acknowledges that he/she remains liable for any amount still owed under the first lien mortgage transaction."  To me, this is no different than the approval letter where they do not waive the deficiency, but seller is hesitant to sign if it means she's giving Chase carte blanche to sue her for the deficiency.  BTW, both of these letters were sent with Freddie Mac loans and from what I have been told repeatedly by Chase, Freddie Mac does not pursue deficiency balances except in cases of fraud.  I advised the seller to get legal advice  but she has no money for this.  What do you'all think?  

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What I would suggest is to discuss with Chase that since this is a Freddie Mac loan and they do not pursue deficiency judments that this letter should not be required.  But your suggestion for the seller to have it reviewed by an attorney is correct.

Thanks, Ben, I'll give that a try (given, of course, I can reach the negotiator and/or her voicemail box is not full!)

If the property is in California, the law in CA gives her protection from any deficiency.  I agree that you should contact Chase and tell them it is unnecessary and will not be signed.

Hi Dianne,

 

Thanks for your reply.  Unfortunately, it is in AZ which is protected in foreclosure, but the jury is still out on short sales.  It would be a poor business decision for Chase to let this go to foreclosure over this letter as the approval letter states that the deficiency is not waived.

Not accurate - I have been told repeatedly by Chase, Freddie Mac does not pursue deficiency balances except in cases of fraud.  Although your state may have protections.

I HAVE been told this by them.  That part is accurate.  Are they feeding me BS?  Have you seen Fannie and Freddie pursue deficiencies in cases not involving fraud?  

I would suggest reviewing the Freddie Mac Servicing Guides.  Forgot to ask, is this a HAFA SS?

No, unfortunately the seller did not qualify.  If it were HAFA, the deficiency would be waived automatically.   

If pretty sure you won't find any general waiver of a deficiency here for a Non-HAFA SS.  If there were, it would be in the Servicing Guide or a subsequent update.

 

Freddie Mac Seller / Servicer Guide:

< look at CH 64 - 69 Servicing Non-Performing Mortgages >

http://www.freddiemac.com/sell/guide/ Click on the Allregs Link

 

Kevin, 

Freddie Mac generally does not pursue deficiencies unless there is fraud.
 

Please don't hesitate to contact me if I can be of further assistance.


P. Downing
 
Servicing Account Manager
 
Servicer Relationship & Performance Management
 

Kevin, 

This has been standard practice, but is not currently addressed in our guide.

P. Downing 
Servicing Account Manager 
Servicer Relationship & Performance Management 

P Downing - 

Thank you for clearing this up!

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