Articles Posted in Short Sales

In a new incentive program beginning in late 2010, Chase is purportly offering $10,000 to $20,000 to homeowners who take the effort to short sale their property. The offer includes a waiver of any deficiency balance. But it only applies to loans actually owned by Chase, not just serviced by Chase. An article in the St. Pete Times today discusses the program in more depth. Chase is apparently providing approvals in approximately 35 to 40 days after an offer is made, while most short sales take at least six months to conclude.

This is opposite of a growing trend of banks and servicers refusing to grant deficiency waivers.

Many loans are actually owned by Freddie Mac or Fannie Mae now though. To check if your loan is owned by Fannie Mae or Freddie Mac, go to the Freddie look-up site and Fannie look-up site which provide an instant answer. No guarantees that the sites are accurate although in our experience they usually are accurate (even though the loan documentation may still be up for challenge do to failures and inconsistencies in the paperwork).

One other way to possibly see who purports to own and service your loan is the MERS look up site.

So if your servicer is Chase and you are unable to continue making your house payments and a modification seems out of reach or doesn’t make sense, use the look up sites above to try and identify if Chase is only the servicer, or if they are also the owner of your loan. You can also call Chase directly and ask if Chase owns your loan or if they are merely servicing it for an investor. Ask who the investor is if possible. The more knowledgeable you are, the more you will know what options are available to you.

There are other more exact methods of determing the owner of your loan as well.
Continue reading →

We have noticed here in the Tampa Bay, Florida legal community that written deficiency waivers of the unpaid loan balances for first mortgages are getting harder to come by. A recent St. Petersburg, Florida Times article focuses in on the potential landmine: “People have no idea of all the trouble that is coming” says Margery Golant, a lawyer in Broward County who sees deficiency defense cases on the rise. Florida is known as a recourse state and the lenders have a right to obtain a personal judgment for the remaining unpaid balance. They then can seek to collect that debt by garnishing wages or bank accounts or placing a lien on other property that the debtor owns.

This is true of short sales regardless of lender. It is also true of deed in lieu or other voluntary return of the property through a consent judgment in rem (which means against the property only). Even Freddie Mac has aggressively pursued new reduced promissory notes in short sales.

What does this mean? We think it means someone will come knocking to collect that debt eventually. It might be five years down the road (prior to the expiration of the statute of limitations), but if the lender obtains a deficiency judgment, like any judgment it can be collected for 10 years and renewed for a second 10 year period. In the State of Florida, a judgment creditor has 20 years to try and collect an unpaid judgment.