Did a short sale... now 2nd mortgage got sent to collections.. (Las Vegas: real estate, foreclosures)

airics · 09-25-2009, 09:50 AM

you're welcome, it is a great site

007 license to sell · 09-26-2009, 07:55 AM

Unfortunately a with a second they can come after you for up to 6 years and then they can get that extended. It's in your contract your on the hook, you really need to get an attorney.

pinkoctober · 10-02-2009, 10:33 AM

I sure HOPE those who are considering a short sale right now have the good fortune to come across this this blog. SHORT SALES CAN BE CATASTROPHIC!!! BEWARE!!! I TRULY THOUGHT I HAD ALL THE INFORMATION AND WAS ACTING IN GOOD FAITH TO DO RIGHT BY OUR LENDERS!!! AND NOW IT WILL HAUNT ME FOR YEARS TO COME AND COST THOUSANDS AND THOUSANDS MORE!!!! I CANNOT believe I have wound up in this situation! My husband and I made HUGE sacrifices to keep mortgage current on underwater home we had to move from due to job transfer. We spent a year of non-stop effort and money in repairs/upkeep/mort payments to attain a short sale. Never having defaulted on ANYTHING we wanted to do the best we could for our lenders (80/20 situation). We closed then found out that the bizarre verbiage in the 2nds approval left us on the hook for $50K, and in a way that we have waived all our rights of defense under anti deficiency laws. I worked with them in good faith for a YEAR, the loss mitigator is fully aware of the extreme effort my husband and I put into avoiding foreclosure (which would have fully protected us and saved us THOUSANDS in mort payments on a home we weren't even living in) and had we foreclosed, this lender would have netted ZERO. It is absolute FRAUD!!! I even saw an attorney prior, as your supposed to do, and was told I was protected. Turns out it was a misunderstanding, he thought I was foreclosing and not short selling. You'd think they are the same as far as anti deficiency laws are concerned THEY ARE NOT! A SHORT SALE CAN STRIP YOU OF YOUR RIGHTS! HOW IS IT THIS IS GOING ON????????

olecapt · 10-02-2009, 11:57 AM

Quote:

Originally Posted by pinkoctober

I sure HOPE those who are considering a short sale right now have the good fortune to come across this this blog. SHORT SALES CAN BE CATASTROPHIC!!! BEWARE!!! I TRULY THOUGHT I HAD ALL THE INFORMATION AND WAS ACTING IN GOOD FAITH TO DO RIGHT BY OUR LENDERS!!! AND NOW IT WILL HAUNT ME FOR YEARS TO COME AND COST THOUSANDS AND THOUSANDS MORE!!!! I CANNOT believe I have wound up in this situation! My husband and I made HUGE sacrifices to keep mortgage current on underwater home we had to move from due to job transfer. We spent a year of non-stop effort and money in repairs/upkeep/mort payments to attain a short sale. Never having defaulted on ANYTHING we wanted to do the best we could for our lenders (80/20 situation). We closed then found out that the bizarre verbiage in the 2nds approval left us on the hook for $50K, and in a way that we have waived all our rights of defense under anti deficiency laws. I worked with them in good faith for a YEAR, the loss mitigator is fully aware of the extreme effort my husband and I put into avoiding foreclosure (which would have fully protected us and saved us THOUSANDS in mort payments on a home we weren't even living in) and had we foreclosed, this lender would have netted ZERO. It is absolute FRAUD!!! I even saw an attorney prior, as your supposed to do, and was told I was protected. Turns out it was a misunderstanding, he thought I was foreclosing and not short selling. You'd think they are the same as far as anti deficiency laws are concerned THEY ARE NOT! A SHORT SALE CAN STRIP YOU OF YOUR RIGHTS! HOW IS IT THIS IS GOING ON????????

Presuming you paid the Attorney...or likely if you did not...the Attorney is actually on the hook for this one. Get another and go after him or her.

It is a frightful big error.

007 license to sell · 10-02-2009, 08:46 PM

Here is some important info for folks considering a short sale: The 2009 Legislature has made some changes regarding short sales:
Lenders may still recoup their loss after a short sale.
The lender who seeks a deficiency judgment has six months to file in court and ask for the judgment.
NRS40.455 The lender who approves a short sale,however,has other options available to it. The lender may approve the short sale , releasing the lien encumbering title to the property,but may not release the borrower from his indebtedness entirely. In that case, the lender has up to six years to sue the borrower for the difference between the loan amount and the sale amount.
This is because the loan includes a promissory note, which is contract. Nevada's statuteof limitations on contract disputes is six years. NRS 11.080 Alternately,the lender may condition short sale approval on the seller agreeing to a new promissory note based on the difference;again,the lender would have six years to pursue this note. Or , the lender may choose to forgive the difference entirely and issue a 1099 to the seller ,who must report the difference as income. Whether or not it is taxable is a question for the seller's CPA. It is vitally important that sellers understand what option the is choosing for itself when agreeing to a short sale.
This information is taken from the southern Nevada Reator Ten things you need to know now.
I hope this infor helps anyone thinking of doing a short sale in the future, it is so unfortunate for pinkoctober or any one else this has happend to.

jaunespinoza · 10-03-2009, 04:59 PM

007, does this apply to both a first and second mortgage? I told my brother about this thread, and he seemed surprised, but acknowledged it would vary from state to state. I've also heard (not that we talk of rumors here at C-D) that a short would give you a 190 point hit on your credit score. Can we all sing---"Jingle Mail, Jingle Mail." and you get the free rent. Has anyone seen my kitchen sink?

airics · 10-03-2009, 05:20 PM

a short sale is riskier than a foreclosure.. easy 150-200 pt hit plus deficiency risk.. foreclosure has a bigger hit on the scores but they only have 6 months to file for a deficiency judgment. this is only for a 1st mortgage.. 2nd mortgage can go to 6 yrs

kainers · 10-03-2009, 05:27 PM

So even with a foreclosure they can go after deficiency?

airics · 10-03-2009, 06:19 PM

yes, however they only have 6 months so that is unlikely..

olecapt · 10-03-2009, 08:25 PM

Quote:

Originally Posted by airics

yes, however they only have 6 months so that is unlikely..

That is not the problem. Deficiency judgements on a first have all sorts of problems. You have to actually start a court proceeding...it is not non-judicial. There are defenses. There is a need to establish value. The worst problem of all is that the obvious response in an owner occupied situation is to go bankrupt.

NOte that in general the lenders are not attempting to collect these seconds but are in fact selling them for low percentages to debt collectors.

One should never complete a short sale and try like hell in a foreclosure to make sure these things are resolved.

Note that it is also relatively straight forward to strip off a second via a BK. So some may chose to take a BK and hold the home and the first.