DON'T SHORTCHANGE SHORT SALES

Article below points out a more and more common "flaw" if you will of short sales that are not properly managed. The seller thinks the sale has gone through and he has been released from the debt but INSTEAD, upon closer review of the short sale acceptance documents you find that all the bank agreed to was to RELEASE the LIEN on the property so it can be sold. If  not CLEARLY spelled out then you cannot assume that you are not still on the hook for some or even all of the old debt.  We see MANY investor homes where the one or both of the lenders ask for SOMETHING more than the proceeds of the sale to issue a satisafaction. I guess that is the point that needs clarifying here. A release of the lien on the house ONLY clears the way to SELL the house - that's not the same as issuing a Satisfaction of Mortgage. A satisfaction ALSO clears the lien but it is also the thing that shows on your credit report that you have, by either paying in full or in part, satisfied the debt.   Anyway - BEFORE you get to the closing table, if you are working with your Realtor on a short sale - make sure you understand what is being offered to you and what will be expected of you post closing and include in that discussion any possible TAX ramifications as well. You may elect to suffer some of this but you need to understand what you are agreeing to....see below -   Mike - W


Short sales were a hot topic at a recent meeting of the California Association of Realtors' board of directors; and brokers, brokerage attorneys, and risk managers underscored the importance of agents reviewing all short sale documents carefully. They should ensure that lenders consider the balance completely paid after the short sale goes through. Sellers who find out after the fact that they still owe the entire loan balance will be dissatisfied and possibly blame their real estate agent. Want more short sales information? Go to: http://www.floridarealtors.org/LegalCenter/HotTopics/index.cfm

Source: Realty Times (12/01/08) Hunt, Bob
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