REAL EXAMPLE of a Lender Pursuing a Short Sale Deficiency and Asking the Seller to Sign a Promissory Note That the Bank Isn’t Even Entitled To!
Below are BACK TO BACK LETTERS sent by the same institution (Chase). The first letter is an example of terms I have personally negotiated with Chase. The 2nd letter is an example of the same lender pursuing a deficiency that they are clearly not entitled to collect. YES, IT’S COMPLETELY RIDICULOUS, but this happens all the time.
Here’s what happened: We pushed and pulled until Chase agreed to withdraw all security interests and forgive any deficiency balances from the short sale (of course, for a small $3000 payment which in this case was paid for by the 1st lienholder). We had them put this in writing.
Even after agreeing to these terms, Chase still managed to sell their UNCOLLECTABLE debt to a debt collections company. The debt collections company then proceeded to send a letter to one of my clients stating that a deficiency balance was owned the property, EVEN WHEN THEY AGREED IN WRITING TO FORGIVE THE DEFICIENCY BALANCE IN RETURN FOR A $3000 PAY OFF, WHICH WAS PAID AT CLOSING.
If the client were to some how lose connection with me, it is possible that the client may have arranged a payment plan with the debt collections company. The client may have been under the impression that the company was “official” and that due to the “serious and professional” appearance of the letter, that the deficiency was still owed in full.
Whether you are an agent or a homeowner, exercise discretion and filter all information with a short sale professional. We’ve seen and heard it all, so don’t allow these things to bother you. Rather, take action and call for help.
Be Strong and God Bless