In Joe’s last video he talked about the anti-deficiency rule.
Here he is discussing how second-mortgage lenders still have recourse in a foreclosure:
Jim Klinge
Klinge Realty Group
Broker-Associate, Compass
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
- 682 S. Coast Hwy 101, Suite #110
Encinitas, CA 92024 - (858) 997-3801 call or text
- klingerealty@gmail.com
CA DRE #01527365, CA DRE #00873197
I believe the statue of limitations on debt collection is 5 years from the last payment made. It won’t be a surprise to me if a debt collection law firm buys up a bunch of seconds for 5-10 cents on the dollar and then sues all those home owners that lived rent free for a couple of years. Certainly there’s a decent opportunity to recover some money from someone who hasn’t had to pay rent for 2 years.
And this is the very reason why people that are making the business decision to get out of the house, it’s generally wiser if you have assets to walk-away (foreclosure), and therefore not having to provide any financial info to the lenders to approve a short-sale. Even if you go for the short-sale, and lie about your finances, you’re committing fraud and you open yourself up to all kinds of legal action.
Talk to a lawyer about this.
What’s ironic is that you might have to pay the 20% downpayment long after you move out.
I believe that a short sale is not akin to a single action… that means that if the bank forecloses, you get to stay longer AND have the first note resolved.
In a short sale, not only do you have to deal with the buyer, the bank, d-bag real estate agents, but the bank can come back to you for the deficiency as well (assuming you haven’t slit your own throat with a promissory note anyway)
I’ve always said, foreclosure is often better for a seller than a short sale. I am not a lawyer, get real legal advice.
The problem is… most real estate agents AND banks like short sales more than foreclosures. The former for the commissions, the latter for the collections ability.
Chuck