Deficiency judgment is refers to the difference between the amount that the house was sold for and what you owe the bank. What happens next is that the bank will do nothing on your remaining debt. However, five years later, they will go to court and obtain a judgment to your remaining debt. After they have a judgment, they have 20 years to collect on the judgment. You can’t run from any of these since they have both your social security numbers from the days when you were married and owned the house with your spouse. Therefore, collecting on the judgment would be easy for them. If you are unable to pay your debts on time, they can garnish your wages and confiscate some of your personal property to fill in your debts. As long as you were on the title and deed to the property at the time it went foreclosure and the judgment of divorce does not clear you from the responsibility for the debt. To prevent this dilemma from happening, you should negotiate with your lender at the time of the short sale.

Short Sales Sacramento

Get all your questions answered. Starting the month of March, Angel Lynn will be hosting homeowner awareness classes in Sacramento.  Learn about how to avoid Foreclosure, what is Short Sale and how you can modify your loan.   Classes will be held at 1913 Capitol Ave. Suite C, Sacramento. Come get your questions answered about what is going on in the market.  What to expect and how to protect your family.  Please call our office to reserve your seat.  916 443-1445.

http://hosted.cdpe.com/23409/

Wednesday Nights 6pm

1913 Capitol Avenue, Suite C

Sacramento, CA 95811

Less impact on your credit score

All mortgage debt is fully discharged

Source: Dual upside to foreclosure alternative, (The Early Show (CBS))

Many clients ask the question what will happen to my credit?  The answer is a Short Sale will have much less impact on your credit.  I have several clients that have been able to buy a new home after a Short Sale.

Short sales allow a homeowner to close on the sale of property worth less than the debts secured by it. Typically, the lender agrees to accept the net proceeds from a closing in exchange for releasing its lien. Lenders are not agreeing to a short sale to be generous, they are convinced that it will come out better than it would by foreclosing on the home and pursuing the borrower for its losses. While the procedures for a short sale will vary from lender to lender, most lenders need to be convinced of the following:

The sales price of contract is equal to what they would be able to sell the property for after a foreclosure. While the lender may review the market analysis provided by the agent, they will often confirm the market analysis by contacting its own sources, such as an appraiser.

The commission for the transaction is equal to the commission it would pay its agent for selling the home after foreclosure. The lender will need to know as precisely as possible the amount of proceeds it can expect to receive from the sale.

The lender will want an explanation of the circumstances which caused short sale in the first place. These usually include death, medical problems, divorce, loss of a job, or a job displacement requiring a move.

The seller doesn’t have the resources to make up the mortgage shortfall on their own. The lender will require a full assessment of the financial condition of the seller. Financial statements, income and expenses, tax returns and the seller’s paycheck stubs should be provided. The seller’s financial condition is a tricky proposition. While the lender will be reluctant to approve a compromise without reviewing strength of the seller, this information will help the lender in pursuing the seller for a post-foreclosure deficiency if the short sale does not take place.

A seller with few assets, little or no income, and a willingness to file bankruptcy has little to lose by providing this information. Those with other assets, a good job with garnishable wages, or a desire to avoid bankruptcy will put themselves at risk in the process. Those considering a short sale need expert legal advice regarding the wisdom of submitting financial information to the lender.