My New Blog

For years I had been warning that this could happen.  I warned that if a short sale approval letter is not reviewed by legal counsel, the seller could have exposure (liability, unexpected debt).  Unfortunately, that is exactly what came across my desk this morning. 

Here is the story.

A few years ago Lisa** closed a short sale with an agent (NOT one of our agents). The agent assured her she would no longer owe anything on the loan. But the short sale agreement issued by the bank said something else.  Its not easy to spot...but the agreement was a "lien release" not a "liability release".  This simple difference in wording and the type of loan meant she still owed the remaining loan balance after the short sale.

Lisa unfortunately relied on her agents advice and for the last few years has been fighting the bank claiming this was not due (which is why she copied me).  However, it now appears that the amount really IS due.  The agent did not catch the difference in wording, or failed to disclose it to her client, and left her client exposed.  Its not pretty. 

Recent changes in law (July 2011)  provide protection in California so that any short sale closed after that date will not result in the kind of exposure that Lisa is facing. But what about the hundreds of thousands of homeowners who, like Lisa, closed before July of this year?  The unfortunate answer is they may be exposed. 

If you or someone you know is wondering about exposure after a short sale, feel free to send me over the short sale approval letter and I will share my thoughts (at no cost, of course).  We can quickly review and determine liability.  

If you or someone you know is considering a short sale, consider Freedom First Properties.  We are experienced with a 100% closure rate on our short sales...and we like to keep it that way.  Our sellers have the benefit of a realtor, broker and attorney...and all short sales are done at no cost or expense to seller. 

If you have any questions, do not hesitate to call. (714) 863-5485

Melinda

Realtor + Broker + Attorney

PS **Not her real name.