How to Avoid a Short Sale Deficiency Judgment

by | Dec 19, 2017 | Lawyers

Short sales are smart options for homeowners who are having issues paying their mortgage debts. In this agreement, the lender takes the sale price of the home, even if it is less than what is owed on the mortgage. This lets the homeowner avoid foreclosure.

However, there are some cases where the lender may seek a short sale deficiency judgement months or years later, leaving them surprised that they still have to make payments, even after they thought everything was settled. Hiring Lombard short sale attorneys are the best way to better understand these situations.

Short Sale Deficiency Judgment Defined

The amount received from a short sale is typically less than the entire mortgage debt. The difference between the total debt and selling price is a deficiency. After a short sale, the lender has the right to pursue a personal judgment against the borrower. If the deficiency judgment is successful, the lender may be able to collect the amount owed by garnishing the borrower’s wages, levying their bank account and other methods.

Avoiding the Short Sale Deficiency Judgment

It is essential to hire Lombard short sale attorneys any time a short sale is being considered. They can help explore the options to avoid this judgment. Some of the most common options available include making an offer to settle the remaining deficiency, waiving off the right to pursue this in the short sale contract, or declaring bankruptcy.

The best thing for anyone to do is to take the advice of Lombard short sale attorneys. They can review the facts of the case and make sure the right avoidance method is used.

Find out more about avoiding deficiency judgments by visiting the Covert & Covert, LLP website.

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