I need all the advice I can get.

I am going through a short sale of a condo in Northern Florida. The loan balance is approximately $129,552 and the buyer offer (95K) provides a payoff of about $85,935 leaving a deficiency of about $43,617.
 
The lender (Compass Bank) has a 50% settlement offer at $21,808.50 at closing. The buyer is willing to contribute $5000 toward the deficiency balance. I am also willing to contribute cash but I don't have the remaining balance. I was told that the lender will only take $21K in either cash or possibly promissory note and will not further negotiate

My question is do I try to settle the deficiency of the short sale to avoid judgement? Or do I go through the short sale and wait to for lender to come after me for the $43,617. And if they do come after me, will I be able to negotiate better terms.

Loan is on a primary residence and an only one lender loan and no PMI.

Any advice in regards to Compass Bank?

Thanks

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BBVA Compass Bank, the nation's 15th largest, was one of the biggest financial institutions to survive the economic crisis without aid from the federal government's Troubled Asset Relief Program.

You could call your Compass bank short sale rep to talk to them yourself and verify that whoever is telling you this is in fact accurate.

If they are offering a “Lien-Release” only written short sale approval then your options are to accept those terms and close fast then deal with the deficiency balance about 60 days later when that mortgage converts to a lower valued non-secured consumer finance loan.

OR you can negotiate the deficiency balance before closing with the buyers $5,000 cash (if the buyers lender and loan program allows for that) and/or a promissory note at perhaps excellent terms. (I have seen 5 years at 0% interest before).

It is your choice and I suggest you “trust-but-verify” before you make a fully informed final decision. 

 What does this mean "mortgage converts to a lower valued non-secured consumer finance loan"? Unsecured debt?

And do you or anyone happen to know what happens at that point? I got the feeling that Compass bank short sale department and the recovery department are distinct and don't really work together.

 

Does it affect your credit more if you don't have deficiency waiver in the short sale and then have creditors go after you? 

If your real estate agent is unable to answer these questions you need to call Compass Bank Neli.

Hahaha...I actually did and that left me even more dazed and confused. 

Neli, it might be wise to hire an attorney.

You seem to have grasp on part of this however one of the most difficult parts of the short sale process is low borrower/seller comprehension.

Lean on your real estate agent to explain all of this to you or hire an attorney to navigate the final stages of the transaction for your benefit.

And again....I have both...a real estate agent and a real estate attorney who is handling this short sale but all she does is come back and relay the message to me and tell me that the bank offered.  This is why I called the bank myself.  NO negotiation going on whatsoever on my part. 

If your agent is unable to negotiate this transaction for you and the closing attorney (who represents the buyers lender by the way they are NOT your attorney) is not helping you, then either hire your own "sellers" attorney or negotiate this direct with Compass Bank yourself.

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