The new wave taking over the courthouse these days, is lenders filing suits against the prior homeowner/borrower for the deficiency of the mortgage judgment, after the foreclosure auction or short sale. A deficiency balance is the short fall, or balance that is left due and owing, after a property either sells on the foreclosure auction or in a short sale. With relation to a short sale, a deficiency balance can almost always be negotiated to be “waived” or forever forgiven so that the lender does not and can not come after the borrower for any monies owed post closing. That is, the lender agrees to receive a certain NET or proceeds, and call it a day after the borrower. In this scenario a Satisfaction of Mortgage must be issued, signed and recorded against title to the property to make title marketable to the new owner.
In a foreclosure auction, a judgment is the amount the borrower is left owing after the case ends. Often times, however, the lender will not recuperate the full judgment amount at the foreclosure bidding site. The balance is called the deficiency. The lender then has one year to collect on that deficiency.
New laws and statutes with shortened time periods to collect that deficiency have been recently enacted. Although consumers don’t know it and lenders file suits anyhow, that is the biggest defense a consumer has to defeat the suit.
If you are facing a lawsuit for a deficiency balance, or your short sale lender does not want to negotiate the waiver of deficiency, speak to an attorney today. At the Law Offices of Jacqueline A. Salcines, PA, we are not only experienced and knowledgeable on how to handle the negotiation of these deficiencies, but we defend borrowers every day against such suits. Call or write for a free evaluation of your case today. The first consultation is always free of charge.
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