Will I be subject to future liability after a bank short sale?
If you're involved in a bank short sale, you need to know that you MAY still be liable for the balanced debt to the lender. However, we have seen instances where the lender relieved the borrower from future liability or from the pursuit of the deficiency after the short sale.
If you financed the purchase of real estate or if you refinanced your property to tap into your equity, you signed and executed two main documents in exchange for the loan from the lender. Those documents are the Note and Mortgage.
The Mortgage is the homeowner’s pledge of their interest in the real property as security for the sums borrowed from the lender.
The Note is the borrower’s personal promise to repay the sums borrowed from the lender at the terms prescribed therein.
In other words, the Note is the definition of payment.
It states on paper
- How the loan will be repaid,
- What the interest is
- How long the payments will continue.
The Mortgage is a separate document that is the security to the Note.
So, if the Note does not get paid, the lender uses the Mortgage to foreclose on the property. The Mortgage can also be called a lien.
You may learn more about a bank short sale by downloading our free eBook "12 Things You Need to Know To Survive a Short Sale" or contact us with your questions and concerns.
Serving Fort Myers, Cape Coral and Naples, Florida.
Winged Foot Tite, LLC is not associated with the government, and our [short sale orchestration] service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.