O.K., so after months of submitting paperwork, etc. the mortgage insurance company approves the short sale but says seller must either kick-in $6K at closing or to sign a 10-year note for $12K & make monthly payments. The property is basically selling at market value, but M.I. says that they are being reasonable because seller earns too much money.
Seller however claims he is debt even though his salary is relatively high and stubbornly refuses to make the $6K contribution and/or sign a note.
Lender already obtained a foreclosure judgment against seller and the property & the property is scheduled for sheriff's sale unless I can close the short sale.
Seller's lawyer says lenders "rarely" pursue deficiency judgments which may be true. However, I'm thinking they can still sell that judgment for pennies on the dollar to a debt collector who in turn can pursue my seller if they feel seller can come up with the money.
If so this would make my seller client penny wise and pound foolish.
My seller doesn't otherwise seem to care if he has a foreclosure tarnishing his credit report vs. settling his debt by way of a short sale. (Wish I knew this before I got started).
Does anyone have any suggestions. Is anyone aware of recent lender trends and/or policies to pursue deficiency judgments? Thanks for your input.
Joesph, just for the sake of clarification charge off and forgiveness of debt are two quite different things lest the reader become confused and see the two terms as one and the same .
Charge off in itself does NOT prevent further collection activity or even suit.