Because this was a cash out refi loan, Chase will not waive its RIGHT to pursue the balance, whether they
pursue or not is a different story. This is a sale in the state of CA so even
if the bank has the right, The state does not go after balances on a short
sale. I hope this helps u! Let me know if you have any questions.
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It’s true; non purchase money seconds become unsecured debt just like credit cards once the value of the property fails to cover the amount owed. They will allow the Lien (not the debit) to be removed for a fee of course but they can and will ask for some sort of payment agreement typically for some lesser amount and it’s structured something like, zero interest for a period of time that makes those payments affordable for the client.
All this is situational and nothing in a short sale is ever a rule of thumb, only trends.
Ok, what about when it is not a second but just a bigger first? The borrowers original loan was for $800K, he refinanced and it is now $900K and the lender is going to be getting about $800K in proceeds (used round #'s for simplicity). I am guessing that this is the same thing where he is on the hook in the future for the $100K difference?
If we assume the lender forecloses, and the proceeds from above are the same in this instance, the lender can still go after the difference correct? I just want to make sure that the lender does not waive all future recourse by foreclosing. The homeowner has some thoughts about letting it go back to the bank, and I am trying to explain to him that the difference would probably be larger if the bank were to take it REO thus putting him in worse position than short sale.
Your help is greatly appreciated. Thanks!
VIctor T. Gurrola said:It’s true; non purchase money seconds become unsecured debt just like credit cards once the value of the property fails to cover the amount owed. They will allow the Lien (not the debit) to be removed for a fee of course but they can and will ask for some sort of payment agreement typically for some lesser amount and it’s structured something like, zero interest for a period of time that makes those payments affordable for the client.
All this is situational and nothing in a short sale is ever a rule of thumb, only trends.
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