The Orlando Sentinel had a good article today that is worth a read by any homeowner considering a short sale as a way to get out of an underwater loan. Although it is a Florida-focused article, the same caution would also apply to a Maryland homeowner:
“What these homeowners, whose loans are “underwater,” may not realize is that they could successfully complete a short sale of their house but then face a lawsuit from their lender for not paying off the entire loan, a shortfall known as a “deficiency.”
At particular risk of being hit with such a debt judgment are owners of second homes and investment properties, homeowners who haven’t faced any kind of financial hardship, and owners who have a second mortgage.” (emphasis added)
Sounds like a few Ocean City, Maryland area homeowners I’ve met recently.
“That’s going to be a huge problem moving forward in the next few years,” said Orlando lawyer Matt Englett, who specializes in home foreclosures. “These people who use Realtors to advise them on the transactions can end up facing deficiencies, and the deficiency notes will go to third-party collections agencies, and they will start suing and progressively pursuing those people.”
Folks, consult legal counsel before attempting a short sale on your own. As a Maryland licensed attorney and real estate broker with over 20 years of independent real estate private practice experience, I stand ready to help.
The full article –
http://www.orlandosentinel.com/os-law-and-you-short-sales-20100704,0,2086741.story
