Replies to This Discussion

Permalink Reply by Pat Chadwell on October 17, 2011 at 7:43am

what state are you in?  In California it is not a problem.   http://www.shortsaleexpeditor.com/in-the-news/breaking-news-califor... 

Permalink Reply by Sylvia Barry on October 17, 2011 at 7:55am

The Chase Approval Letters for first lien we received did have language to release my clients the liability of the remaining balance.  However, we had to negotiate with Chase 2nd Lien to change to different language with a bit higher settlement payment.  

Permalink Reply by Smitty on October 17, 2011 at 7:57am

Stacey, I would just send the approval back and note you are in a non-recourse state and they must comply with state law.  Ask them to remove the language. 

 

I don't understand why your clients would want to foreclose rather than close with this language in the short sale.  I don't EVER see a foreclosure as a better solution, however it's DEFINITELY not a better solution if you are in a non-recourse state.  The bank cannot seek the difference.

Permalink Reply by Stacy Owens on November 1, 2011 at 8:44am

our problem is that we are a non-recourse state on foreclosure only. So in many ways it is beneficial for a seller to foreclose rather than face the possibility that the bank will come back on them with the deficiency within the next 6 years if they short sale. The language was very strong. I have submitted the paperwork that they required to have the language removed and it's been 3 weeks. Still no response.

Permalink Reply by meme on October 28, 2011 at 9:16am

Yes.  Chase played hard ball with me on this.  My issue is I'm in Fla, the prop was a investment so i was not exempt by any means and they could "Chase" me for the deficiency. 

Things that helped me.

1.  pushed Chase into a corner, stating i was already prepared for BK.

2.  provided PROOF they did and do put the verbiage in the letters, this after my nego said they dont.  If you need a copy, i can show you mine as proof.  this stopped the nego from all the BS.

3.  you will have to kick some cask @closing.  it's negotiable.  Personally since i was doing most all the nego i partnered with my buying and selling agents and they agreed to kick out the cash @ closing for me.  Nice huh?  ;) 

Permalink Reply by Richard Zaretsky on November 3, 2011 at 12:00am

You need to point out to the lender / Servicer that you are in a non-recourse state and if you let the home foreclose, the lender cannot pursue the borrower.  That should alert them to remove the language.  I am not certain which state you are in, so it is possible that under state law since the obligation is for the purchase of a home, the note is non-recourse regardless of the disposition of the mortgage through a release.  You need to consult with local real estate counsel for that key answer (ie: it may not matter as a matter of law in your jurisdiction, and thus the letter is fine "as is").