How bad is it? These banks are getting killed; taking huge write downs and not seeing the new mortgages coming in at the extent to which the loss is adding up.
Who wins in all of this mess? In my opinion, “no one.” I have clients that short sold their homes 10-12 months ago with deficiencies they are being forced to pay back. Some of those borrowers are great credit worthy individuals with decent jobs while others aren’t necessarily as capable of managing the debt. Then there are those that have short-sold within the last eight months who are having their deficiencies completely wiped clean with no repayment required; one in excess of $300K. Crazy deals! Much of it depends on who the lender is and how strict they hold the borrowers to the debt states an article from Curbow.
Once the seller confides in the bank with all their information, the bank may use this information against the owner of the property. The home must be listed with a qualified and seasoned expert to negotiate the sale.
By disclosing too much information such as how much money could be given to rectify the loan, the bank may require funds from the borrower at the closing of the short sale. Give as little information as possible suggests Trejo.