Not Free and Clear
Most people assume that after a short sale or foreclosure, the lender cannot continue to pursue the borrower for more money. The common presumption — a presumption that makes plenty of sense — is that if a lending institution agrees to the terms of a foreclosure or short sale, it is agreeing to accept the money it gets under the terms of the short sale or foreclosure as payment in full, even if this amount is less than what the borrower owes on the home.
This is incorrect. Lenders will in many cases come after borrowers after short sales and foreclosures, for the remaining money owed.
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Our lawyers have the experience and skill to help you work with your lenders to avoid problems with deficiency balances. Contact us today for a free consultation.
Defending Against Deficiency Problems
Deficiency is the money that is still owed on a home after a short sale or foreclosure. Usually in a short sale or foreclosure, the home is sold for less than what is still owed on the home. For example, if a house sells in a foreclosure proceeding for $100,000, but the homeowner owes $125,000, then there is a deficiency balance of $25,000.
Most people assume that the foreclosure or short sale eliminates the debt — that the lender accepts the lower payment it receives and moves on. But in reality, there are many instances in which lenders come back to debtors — sometimes years after a foreclosure or short sale — and sue for the remaining balance.
Attorneys Finding Solutions That Will Work for You
One possible solution before the foreclosure is bankruptcy. Chapter 7 bankruptcy might be a way to liquidate the debt and avoid foreclosure (although you will still probably lose your home), and Chapter 13 might help you consolidate and reorganize the debt in a way that allows you to regain control of your payments and keep your home.
We can help you find other debt-relief solutions, as well, like loan modifications that might allow you to reduce the principal or reduce your interest rate and monthly payments.
Contact Us ∙ Free Consultations
There is a lot of misinformation out there about foreclosures, short sales and bankruptcy. Talk with an experienced lawyer at Sobti Law Group for a free initial consultation. Get the truth. Contact us so we can help you find a debt-relief solution that will work for you.
