HELP PLEASE. LBPS Deficiency Judgement in Florida

I am currently involved in completing a short sale with LBPS. They bought my mortgage from Chase about a year and a half ago. I'm scheduled to close on my condo next week, however I contacted a representative from LBPS a couple of weeks ago to ask about them adding in language to my contract that would waive the deficiency judgment. Here is what he wrote back to my lawyer:

I received the email below from Michael this afternoon regarding waiver of deficiency. Please advise him that LPBS policy does not allow me to communicate directly with the customer via email. Please forward this information along to him.

The investor will not waive the deficiency unless the borrower agrees to contribute to the loss from the sale of the property. Based on the estimated loss of $91,633, the investor will waive the deficiency if the borrower will agree to one of the following:
1. Signing an unsecured, non-interest bearing promissory note in the amount of $10,000 payable over 180 months at $55.55 per month
**OR**
2. Contributing $5,000 in cash or certified funds due at closing
I can tell you that I have not seen the investor actually pursue a deficiency on a short sale. But if the borrower insists on having this in writing, they will have to agree to contribute to the investor's loss. Please advise.

 

My lawyer also told me that he spoke to a supervisor over at LBPS on previous short sales and even for his own personal short sale which closed Dec/2010, and was advised that ALL short sales done by LBPS have the deficiency waived… He said that that rule may have changed but I guess what the bank is offering is the option to have that in writing.

 

What would be my best course of action in this case? Pay the $5,000 now or wait around until January and pray that I get issued a 1099, where my debt is forgiven.

Please help.

Thank you.

 

Views: 235

▶ Reply to This

Replies to This Discussion

Permalink Reply by Bryant Tutas on June 6, 2011 at 12:01am
Michael. There is no such thing as "all short sales". LBPS is just the servicer of the loan. It's the investor who makes the rules and these vary from loan to loan. It looks like LBPS is willing to give you the waiver you want as long as you are willing to participate in their loss. So at this point I would either accept the offer they are presenting you OR make a counter offer. Offer them what you can afford. You should be able to negotiate these figues down qiuite a bit. Negotiate the best deal you can get then make a decision. I hope this helps.
Permalink Reply by Michael on June 6, 2011 at 10:11am

Thanks for your response. I just spoke with a representative from LBPS and they, from what I understand, that the $5,000 wouldn't enable them to put language to waive the deficiency on my short sale approval letter, but it would come in separate documents. He told me to be extremely confident that they will not pursue the deficiency and that the only instances that Fannie Mae (the bank that owns my loan) has pursued people for a deficiency judgement is when people have made a strategic short sale and have been dishonest.

So basically what it sounded like to me is that I could pay the $5K, have a piece of paperwork saying that LBPS won't pursue me but that Fannie Mae can still come after me, even though it's likely that they won't. I did try to negotiate the offer down but after hearing that no matter what I paid that I may still be held liable for the difference ($90,000) from the investor I figured it best not to pay anything at all now.

Does this sound correct to you?

I explained to the representative many times that I don't want this hanging over my head and I want to move on and be done with this entire situation. He kept assuring me that LBPS is not in the business of pursuing deficiencies and to be confident that I wouldn't be pursued. I asked if he was me and he was closing next week, what would he do? He said he'd take the advice of my attorney. My lawyer has told me not to be too concerned as he hasn't seen someone pursued for a judgement yet. My real estate agent's lawyer just went through with a short sale through LBPS in December and said he didn't have anything in writing either.

I feel like I'm more confused than I was before I made the call. I just want to do the right thing and move on from this whole unfortunate situation with piece of mind.

 

Mike

Permalink Reply by Lori Young on June 6, 2011 at 10:29am

That is strange the servicer made that statement.  Who is the servicer working for?  If the borrower insist, LBPS should accomodate them on the request.  Keep pushing the issue.  Are you the listing agent?

Permalink Reply by Michael on June 6, 2011 at 11:01am

The representative is from LBPS. They work for Fannie Mae I assume, since Fannie Mae is the one that served me with foreclosure papers a couple of months ago.

I'm the borrower, not the listing agent. I made the call to LBPS today, at the suggestion of my real estate agent's lawyer. He said that hearing directly from the person who is going through the hardship is better than them hearing from a 3rd party. 

RSS

Members

© 2024   Created by Short Sale Superstars LLC.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************