Hi Everyone,
I'm looking at my first SS with a bankruptcy involved. I was told by a very experienced short sale agent that the bankruptcy had to be finalized before the short sale could be done. However, my client's bankruptcy attorney did not give him that impression. What the bankruptcy attorney did tell him was that the bankruptcy would not extinguish the liens against the property, including a second mortgage AND two liens from other non-mortgage creditors, and that it would be up to his agent to negotiate with those creditors to get them to sign off on the liens to get no proceeds so that the short sale could happen. I don't think I'm getting correct information about those other creditor liens. Anyone care to comment? Anyone have a lot of experience with bankruptcy and short sales? Thanks!
Sue
**********************************
like buttons
Replies
I have a client with a CH7 discharge and had to get a Trusttee Letter stating the property could be sold. I have another client currently making payments under a CH13 and that bank is also requiring a trustee letter. On the other hand, I just listed 2 properties of a seller in a CH13 and Chase is not requiring any letters at all, as a matter of fact, Chase is offering huge seller incentive.
I think he best bet is to have the client contact the attorney or trustee for clarification. If at all possible, contact the trustee rather than the attorney.
I understood second liens may be cleared in bankruptcy (equity lines..not purchase money), however the attorney should be the one to tell you that and if he's saying they aren't going to be included in the bankruptcy, you'll have to negotiate them all.
The two that I've done, both lenders wanted a discharge filed before they would consider the short sale.
Good Luck.