what are the chances of the VA forgiving the deficencey in a short sale in California?

I am selling my house that the mortgage is through Citimortgage and it is a VA loan (JEMC?).

I bought the house almost exactly 2 yeas ago for 285k and the only offers I have received are for $145k and $150k.

My concern is that the deficency will not be forgiven  by the VA and due to my salary reduction I could not afford to pay back the deficent amount.

My realtor is not familiar with the VA process only telling me that all of the short sales they have done the deficent amount has been forgiven.

I am going between calling the bank and letting them foreclose on the house instead of going through all of the sale process only to have to file bankruptcy on the defeicnt amount at a later date.

 

Please help.

Thank you

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Replies to This Discussion

I would immediately call the VA hotline which for California is the Phoenix Regional Loan Center 1-888-869-0194 to ask this question. You or your Realtor should do this. When you took out a VA loan, you paid a VA funding fee which is the equivalent of Mortgage Insurance for the Government. Therefore, I would not assume that foreclosure is the best way. I would discuss the short sale process with them.

Hope this helps.
Phil - Please ask your Realtor to join our site. What you should do is a VA Compromise Sale, which is similar to a short sale. It is the terminology the VA uses.

The VA will record your account as "settled". Here is a quote from VA Home Loan Program:

"The VA guaranty, which protects the lender against loss, encourages the lender to make a loan with terms favorable to the veteran. But if you fail to make the payments you agreed to make, you may lose your home through foreclosure, and you and your family would probably lose all the time and money you had invested in it. If the lender does take a loss, VA must pay the guaranty to the lender, and the amount paid by VA must be repaid by you. If your loan closed on or after January 1,1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part."
Also, please review my www.shortsales-emeraldcoast.com website for more details.

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