Howdy Folks -
I have a file I am trying to escalate - PHH Mortgage / Fannie has approved a certain short sale. However, glaringly missing from the approval letter is any release of future pursuit of deficiency.
PHH Mortgage is saying they have written guidelines from Fannie that say they don't plan on pursuing a deficiency on short sales where there are deficiency laws. Naturally, they won't release those guidelines and they state because of these guidelines they won't re-submit the package to get the release language added.
Naturally, the sellers attorney is advising not to accept - makes sense to me. I have talked with one supervisor at PHH with no luck and called Fannie and left message in Level 2 support and haven't heard anything back.
A few questions - has anyone dealt with this?? and were you able to get Fannie to release?? Also, any higher level contact info at Fannie or PHH would be appreciated.
Thanks!
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Christopher. I just got an approval on a Suntrust Fannie backed loan. Same type of approval you got, only going into it, the negotiatior told me I had to bring over $40,000 to closing for them to issue a letter releasing their deficiency rights. Ummm...my sellers don't have $400, so THAT won't be happening...so I get the approval and it states
1) lien release
2) the debt is Settled in Full for Amount Less than Owed
3) Inferred 1099 would be issued
Now if the DEBT IS SETTLED IN FULL, there should be NOTHING for them to pursue. If the debt is settled IN FULL, then what exactly is deficient???
We've gone around this on this site and over and over from attorneys and acountants I've been told that if the debt is settled there is no deficient portion to pursue in court.
Not sure what your approval stated but...
Thoughts?
What state are you in? California protects..where are you??
Yeah - California has nice law. Here in AZ the antifdeficiency law only protects in case of foreclosure. With a short sale being a private workout solution it isn't a foreclosure and thus not protected. I know of one RE Attorney in town that advises clients to foreclose and not to do short sale (there are others that advise to do short sales).
I guess the big question is this... can they attach a deficiency legally in an anti deficiency state? Seems to me the law would say that they can not.
Go to www.jigsaw.com and search for Fannie contacts, email every executive level person at Fannie
Well - our deficiency statutes only cover someone who is foreclosed on. Once you do a short sale they don't have the same protection.
As a followup - I just got a call back from Fannie from my message on Friday. They were going to have their short sale folks call the servicer to discuss the options with the language in the approval letter.
We shall see.
Still curious if anyone has gotten a release from Fannie. I have talked to Level 2 person and now asked for supervisor to call me. So far they are refusing to put it in writing, even though they say they won't pursue a deficiency....
Christopher, what do they use as a rationale for not putting it in writing?
Diane -
They really don't have any rationale for not putting it in writing. All I am is told is that they won't pursue the deficiency because we are an anti-deficiency state and they can't put that in writing.
Unfortunately, only a foreclosure is covered by our anti-deficiency laws - not short sale. So it is a little like that story about the turtle crossing the river with the scorpian on its back with the scorpian promising not to sting the turtle (I think that is the story).
OK, understand now... Good luck