Has anyone on the site executed a short sale with Aurora? I have an approval for a short sale from Aurora but my concern is they will not put specific and direct language in the contract that relieves me of the loan deficiency (unpaid balance) despite my lawyer requesting such. My lawyer states that the language in their standard template does not relieve me of the unpaid balance and this legally leaves the option open for Aurora to pursue the deficiency for up to 5 years. Has anyone encountered the same concern or has Aurora (or a cerditor) pursued repayment on the deficiency?
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The property is in Florida. My lawyer spoke directly with the Aurora negotiator and his supervisor on more than one occasion and they said they do not put that language or change the standard contract for anyone. They said they have done over 3,000 short sales sales and heve never pursued a deficiency, and that is not in the banks interest. The stated the only shoirt sale approval they give in writing that the deficiency will notbe pursued is HAFA short sales and this loan is not HAFA. Is the short sale your working on a HAFA loan?
Hi Mary - but do you know of any instance where Aurora has later pursued the balance or deficiency of the loan, or sold it to a creditor who pursued?
Steve
Mary Tyson said:
That is correct...Aurora will not put that specific language in their approval letters. It has been this way for the last couple of years.
We have closed several with Aurora.
You're right, they don't have specific deficiency waiver language, however, look for a statement such as, "If the short payoff amount is remitted to us, Aurora Loan Services will: File a 1099-C form with the IRS and send you a copy....." They can EITHER file a 1099 OR pursue a deficiency, NOT BOTH. If the language says, "MAY file a 1099..." there's some risk, but very little. Bottom line is the deficiency pursuit is expensive and has little chance of success, especially in instances where it's VERY clear that the seller has no money and doesn't have a "high earnings potential".
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