Unpaid Foreclosure and Short Sales Dues can be Realized Through Legal Suits
According to deficiency judgment rules prevalent in states like Florida unpaid foreclosure and short sale dues can be realized through legal suits. Generally the lenders do not sue the borrowers who talk out the matter with them prior to the deal stating cases like job loss or other circumstances opined Anthony Manno of Steelbridge Real Estate Services based in Miami. Nevertheless it would be foolhardy on the part of the borrowers to rely on the verbal assurance of lenders. It should be got down in writing.
The critics say that the lenders will spitefully chase the borrowers although the lenders deny such allegations. Russell Greene of Grand Bank & Trust on West Palm Beach said, “We certainly would not do that. It’s a business decision – not an emotional decision. It’s very time consuming to take someone to court.”
Lenders do not necessarily have to legally pursue the matter themselves. In many cases they sell the debt cheaply to agencies whose job it is to collect debts. The chase will be taken up by these debt collectors who will hound the borrowers said real estate lawyer Shari Olefson. They paid dollars to the original lender to buy the right to worry the borrowers.
Larry Thomas who once owned a house on Pompano Beach said he lacked funds to make a down payment but managed to get the full financing from two loans in 2006. With it he purchased a house with three bedrooms for $245,000. He had gone ahead with the deal with the support of his room mate but when the latter became unemployed things became difficult for Thomas to pull along with the mortgage on his own. The situation worsened when his pay was cut. He tried for a short sale and found many offers when the value of the house went down by 70%. Finally it was sold for $80,000 with the nod from his lenders. But prior to final signatures his lawyer made his lender give it in writing that Thomas would not be hounded for the balance amount.
Many banks give the verbal assurance that they will not follow up the matter but they are not generally agreeable to putting it down in writing.
Last spring new rules were introduced by the state. By it the borrowers would be freed from responsibility for unpaid dues after foreclosure or short sale. But there are many ifs and buts. All categories do not come under this rule.
