The Short Sale Deficiency Note
One of the first questions that I always get from potential short sale listing clients is, "Will I have to Carry a Deficiency Note?". Generally it has varied from bank to bank and deficiency to deficiency. The good news for sellers is that because of the Obama Stimulus Plan you at least will not have to pay taxes on the forgiven debt. I work with Foreclosure Response Team to negotiate all of my Northern Virginia Short Sale Real Estate listings. That way I can spend my time focusing on marketing and selling your home as I would with my traditional sale listings. Below is information that FRT has provided me this week regarding the deficiency questions and issues that I am being asked.
Many of you have contacted me with questions on how to deal with the issue of deficiencies. We are seeing more and more lenders asking for seller's to bear some of the burden of a deficiency by contributing cash, signing a note or perhaps doing both at closing. This is especially true if you are selling an investment property or a second home or if your seller has a HELOC on their property.
Given that many sellers do not fully understand the implications of a short sale and believe that by doing a short sale, they are entitled to walk away without penalty, we are seeing seller's balk at the terms of the short sale and contemplate walking away (i.e. allowing lender to pursue foreclosure) or considering bankruptcy.
What most seller's do not understand is that bankruptcy will not eliminate the foreclosure from occuring. All it does is eliminate the personal liability attached to the mortgage. Thus, the once the seller is discharged from the bankruptcy proceeding, the lender can and will pursue the foreclosure. So unless they are able to make their mortgage payments, they will lose the house.
If you are interested in exploring short selling your home in Northern Virginia please contact Kim Darwaza at 703-856-2254 to discuss the short sale process. Kim Darwaza is a Northern Virginia Short Sale Expert and Realtor with RE/MAX Allegiance. For additional information on Short Sales in Northern Virginia please visit my dedicated Northern Virginia Short Sale website at http://www.NOVAForeclosureRelief.com.