Second lienholder in this short sale situation is Wachovia requiring seller to sign deficiency note as a condition to release the lien on the property.
Seller now states that she won't sign the deficiency and go to foreclosure and then file for bankruptcy.
I have asked seller several times to seek legal advice throughout the process and she states that she has "spoken to someone about the deficiency note and was definitely advised against it. He told me that if the house does go into foreclosure because the lenders will not accept the short sale terms, then he advised me to file for bankruptcy"
Besides the fact, that I don't know how qualified a person she spoke to, this doesn't make much sense to me especially the part of the "lender not accepting the short sale terms" as it seems to be the borrower who is not accepting them.
What else can I say or do so she will proceed? Even after foreclosure couldn't the second lienholder still file for deficiency judgment? The mortgage document states that nothing shall impair lender's right to a deficiency judgment in the event of foreclosure against the borrower.
Needless to say, there's been a lot of work and patience involved in getting to this point. Any comments and suggestions are appreciated. Thank you!
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