Today I wanted to cover a subject that almost everyone we talk to has questions about. It is a tough subject to talk about and the questions are often difficult to answer because the answer is really dependent on your particular situation. The question is always, “What happens after a short sale? Am I still going to have a deficiency or owe my lender money once the short sale is completed?” Again, this is dependent on so many different factors. For example, if you have an FHA loan, they release the homeowner from the deficient amount. The odds are that many other lenders and loan types will also release clients from their mortgages however there’s just no telling until the process is completed.

One of the important things for you, the homeowner, is to make sure your agent will actually examine the letter the lender sends and make sure it says they’ll release you from the deficiency. Most of the forms our customers receive do fully release them from the deficiency but every so often we’ll have a lender that won’t initially release the borrower from their debt. It’s at this point we go back to the lender and request that they release the borrower from the debt that is owed.

Really what a short sale is, is a whole new agreement with the lender. Your approval letter is what spells this agreement out. You need to make sure you’re hiring someone that understands this and can handle it should a problem with the lender arise. We have an attorney in the area that we work closely with so if you want your short sale approval letter looked at by someone in the legal field, they can do that for you to ensure that you won’t owe any money to your lender once your short sale is completed.

If you’re considering a short sale and want to know all the ins and outs of the transaction, please don’t hesitate to pick up the phone and give us a call to discuss your specific situation and whether a short sale is the solution to your mortgage problem.