With approximately 3800 homeowner’s a day heading toward foreclosure, the issue of short sales versus deficiency judgment’s is a hot topic for good reason.  The difference’s between the two terms are significant, but can be summed up as follows.

A Deficiency Judgement is a court order that lenders can obtain after foreclosing on a borrower, if the lender receive’s less money at a foreclosure sale than is owed on the property.  For example, if your outstanding loan balance is $300,000 and the lender sells the property for $250,000, the lender can seek a judgment against the defaulting borrower for the $50,000 difference.

A Short Sale is a negotiated agreement between the lender and borrower.  In a Short Sale, the lender agrees to accept the sales price, with or without additional cash from the borrower, as full payment for the loan.   With a Short Sale Agreement, the lender waives their right to foreclose and the borrower is protected against a Deficiency Judgement.

While lenders may be more willing to make a Short Sale agreement on a Primary residence, if the lender does not agree to a Short Sale, the borrower is not protected from a deficiency judgment, even if the property is their primary residence.  

If you need to sell your home now , and/or you intend to approach your lender about a short sale, it would be to your advantage to have the property listed on the MLS, or at least Realtor.com.    Why 6 Percent can Help. 

Phone 1-800-381-9496 during business hours or email info@why6percent.com.