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EXCLUSIVE: Lawyers say lenders set stage to collect on 'short sales' : North County Times - Californian 04-25-2009 (http://nctimes.com/articles/2009/04/25/business/z096c1b1a5c67baac8825759a00757a6f.txt?ref=patrick. net - broken link)
I don't know how that is an exclusive, lol. That's normal stuff that has been going on the whole time.
As it states in the article, most times it will be removed when requested. The seller does not have to follow through with a short sale if the language is in there and they've covered themselves in the contract with the buyer. That's why it's important to have someone that knows what they are doing, be it a Realtor® or attorney.
I am wondering if these are even "legal" for the lender to insert language into a contract between buyer and seller. They are not a party to the contract.
In Colorado, only attorneys can write such addendums - and they have to be for the benefit of one of the parties. This is not the case here.
I would like to see someone challenge these in court.
They aren't inserting themselves into the contract between the buyer and the seller. They are stating the terms to the seller that they will accept to approve the short sale. It is not at all unusual for the bank to want the seller to take back an unsecured note. That's all they are doing...is saying the seller won't be off the hook for the balance. They remove the lien from the property..the buyer is not effected at all. It's the seller that needs to be careful. Perfectly legal as far as I can see. And is also negotiable.
I don't see anything wrong with this at all. An Owner with a mortgage has a contract with their lender which is secured by a lien against the property. The lender has security and should. If eveyone gets to walk free of their debt nobody will purchase debt and the financial system must shut down in immediate and short order. Why would anyone buy a bond or invest in anything if the borrower has no obligation to repay? I sure work to hard to give my money to someone who will walk away leaving me with nothing.
In principle, I agree with you, Absolute. In reality, debtors are indeed walking away from their debts ( mortgages, credit cards, auto loans) without consequence, other than a temporary ding to their credit score.
And fast forward a few years and they will be given the opportunity to do it all over again.
Just think, the U.S. could become garbage, pot hole, grafitti free if we imposed mandatory community service time onto those who walk away from their debt, in absence of a disabling tragedy or other execption.
In principle, I agree with you, Absolute. In reality, debtors are indeed walking away from their debts ( mortgages, credit cards, auto loans) without consequence, other than a temporary ding to their credit score.
And fast forward a few years and they will be given the opportunity to do it all over again.
Just think, the U.S. could become garbage, pot hole, grafitti free if we imposed mandatory community service time onto those who walk away from their debt, in absence of a disabling tragedy or other execption.
We're in a quagmire. My area averaged 300 lis pendens per year for many years then in 2005 it was 1,000. By 2006 there were 2,0000. and 2007 another 2,000 and more. Foreclosures have beget foreclosures. Now I talk to many people who are justifying their planned default.
Hi all,
I'm sure this has been discussed before, but can someone explain to me why a bank should have the right to come after you for any difficiency if you give back the home or are foreclosed upon?
I was just giving this some thought the other day, and couldn't wrap my mind around the fact that the bank made the decision to give you a loan secured by a home. If you give them the home back, why isn't that enough? Why aren't they made "whole" by receiving the property back? Shouldn't it fall on the bank for improperly/wrongly appraising the property and approving a mortgage of whatever size?
I'm not trying to be confrontational... just wondering the reasoning behind it.
Hi all,
I'm sure this has been discussed before, but can someone explain to me why a bank should have the right to come after you for any difficiency if you give back the home or are foreclosed upon?
I was just giving this some thought the other day, and couldn't wrap my mind around the fact that the bank made the decision to give you a loan secured by a home. If you give them the home back, why isn't that enough? Why aren't they made "whole" by receiving the property back? Shouldn't it fall on the bank for improperly/wrongly appraising the property and approving a mortgage of whatever size?
I'm not trying to be confrontational... just wondering the reasoning behind it.
Thanks!
It's all in, as you put it, "the decision". If the borrower and the lender made a decision to enter into a promissary note or mortgage together you should look to the written terms of the agreement. Some agreements signed by both parties state that the loan has recourse, and some state that their is no recourse. Those who signed a non-recourse mortgage give the property back and the transaction has ended. Those who signed a note with recourse are on the hook for any deficiency.
Shouldn't those who agreed to a non-recourse loan where the bank made the decision to give you a loan secured by a home be in a better position than those who agreed to recourse?
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