CHASE approval: Questions I need answers to from you Superstars.
YESTERDAY Approval came with this language: They will not alter or remove said language. I see that JP Morgan Chase just started using this new language in their approvals. So this won’t be my last time seeing it. All this is situational and nothing in a short sale is ever a rule of thumb, only trends.
The amount paid to Chase is for the release of Chase’s security interest(s) only, and the Borrower is still responsible for all deficiency balances reaming on the Loan, per the terms of the original loan documents.
1. Is Chase simply stating their right to pursue a deficiency judgment?
2. The foreclosing lender cannot pursue a deficiency judgment if they foreclose but can try to with a short sale?
3. This Home was built from scratch to be occupied by Seller, they never got to occupy it. Is it still considering it a Second Home?
4. If considered a Second Home with a Line-Of Credit , then CHASE could pursue the Seller even IF they let it go into a full foreclosure on Both a 1st and 2nd with CHASE?
5. Only the deficiency amount they could go after her will be considerably more because they won’t NET what they NET with this SS deal?
6. The letter is probably a boilerplate letter. This is California, are we cover because it is an anti-deficiency state?
7. CHASE knows everything: Seller makes a lot of money over $100,000 a year & have a saving account with $67K & they have their primary house (which is underwater by $200K). Bank doing this because my client will have pocket money after this is resolved?
8. I never use the phrase “negotiate” with a bank negotiator or anyone else because I am afraid I may take on full liability by using it. I say I facilitate a deal, nothing more. I facilitated this and/or that for my Seller . . . by forwarding any communication, documentation or approvals to my client to consider. My job description is spelled out very clearly on the CAR Agent Disclosure. I ALSO NEVER ADVISE MY CLIENT of anything outside of my agency job description. Is this prudent?
9. There is still insolvency and a bankruptcy that could come later, if needed?
10. Taxes would be biggest problem regardless of short sale?
Replies to This Discussion
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Permalink Reply by Smitty on
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I'll try to help from my experience.
Sounds like boilerplate language, but they seem to be reserving their right to pursue the deficiency. It does not mean they will go to court to pursue a judgment. That's a whole other thing. They can send the file to collections and that's it, they try to collect the debt, but they COULD go to court, but highly unlikely they will.
I have no idea if it's a second home, but it seems like it is. If that's how Chase looked at it, that could be one reason they are reserving their right to collect on the home. If it goes to foreclosure they will still have a deficiency, so it seems they are in the same boat with this approval, but the difference is how it's reported on their credit report. In a short sale it usually shows as paid as agreed, or settled.
Look for language that says something about state regulations. You'll see something along the lines "unless prohibited by state law" - I think that is the line that would cover you in California. I can't answer that. I'm in a deficiency state.
I think "facilitator" is the BEST when dealing with short sales. It sounds as if you covered yourself. You just can't guarantee anything to a homeowner. No one can.
They are clearly not insolvent. Claiming insolvency is only for tax purposes but in this case a 1099 wouldn't be generated so insolvency isn't involved. They MAY be liable for taxes, but I THOUGHT that was only if a 1099 was generated. A 1099 gets generated if the debt is forgiven. The debt is NOT being forgiven by the lender.
They CAN file bankruptcy to clear the deficiency, but I'm no lawyer so they would need to contact a bankruptcy attorney. -
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