Finally your realtor and so-called short sale expert has completed your short sale; what a relief, you didn't have to pay the realtor, you didn't have to incur the cost of an attorney, and it's finally over, right?
Wrong.
Unsuspecting homeowners are agreeing to short sales where the lenders approval letter only states that they are releasing the lien. However, since the homeowner did not hire an experienced foreclosure defense and real estate attorney, they are taking legal advice from a non-attorney, their realtor and signing every piece of paper the real estate agent shoves at them.
That said I do work with competent real estate professionals everyday who are extremely knowledgeable and understand the benefits of a competent, experienced foreclosure defense and real estate attorney. These real estate professionals understand the complexity of these matters and choose to do what they do best,
sell real estate and leave the short sale process and legal issues to the attorney
.
Why any non-attorney would think he or she could successfully handle a legal matter, which this is, without an attorney highly qualified in this area of law remains puzzling to me. We have clients who are themselves attorneys, yet they have come to us for help because they understand this, and realize that in order to do this right; they need really qualified people to help them.
Homeowners, even many real estate agents, do not realize that the bank must release the property lien in order to facilitate the short sale. However, the bank is only releasing the lien on the property and not releasing the homeowner from the promissory note, the financial obligation. In other words; if the approval letter does not specifically state that you are being released from the promissory note and that the bank is waiving all rights to a deficiency, DON'T AGREE TO IT, DON'T SIGN IT and certainly DON'T CLOSE!
The language required in the short sale approval should read something like this;
"Upon receipt of the agreed amount, XXX and/or its investors will waive the remaining balance due on the above-referenced loan and release the borrower from further obligation therein, and waive all rights to pursue further judgment or deficiency."
There is no confusion and it really is quite simple; a real estate agents goal is to sell the property and collect a commission, regardless of whether the bank agrees to refrain from pursuing a deficiency judgment or not. This is one of the many reasons to be represented by a competent, experienced Florida foreclosure defense attorney. Get the legal advice you need and be certain that your interests are being protected throughout the short sale process.
Homeowners I've spoken to are given a false sense of security by their real estate agent that a deficiency judgment may not be later sought. Wrong. These "deficiency judgments" are ticking time bombs that can explode years after the homeowner closes.
What can be scary is that the judgments don't have to be obtained immediately. Banks or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, they can wait up to five years to file and once the court grants a judgment, they have 20 years to collect, with interest. And once the bank has a judgment, they can pursue you anywhere. They can ask for financial records, attach your bank accounts and have your wages garnished.
Although there is no guarantee of negotiating a short sale with a full release of deficiency, your success rate will increase considerably when you engage a competent Florida Foreclosure Defense Attorney.
If homeowners have any doubts about their risks, they should seek legal advice.
We do not charge for an initial consultation, so there is no cost for you to see if we can help.