Deficiency Balance Questions

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Why Would I Do a Short Sale if I Could Not Get an Approval Letter Removing the Deficiency Balance?

If you are worried about a lender coming after you or your financial future, you may not want to move forward without talking to a real estate attorney. But some home owners are willing to accept an approval letter with a without a deficiency removal for the following reasons:

  • If they are in CA, they are comfortable with the new law CCP 580(e) and its provisions regardless of what the approval letter states. (ALWAYS consult with an attorney in these instances)
  • To stop the payoff clock and stop incurring future or larger deficiency, or payoff.
  • To avoid a foreclosure on their credit.
  • To settle the deficiency issue at a later date.
  • To try and do the most responsible thing and get the bank the highest price possible for the home.
  • To avoid any attorneys or additional fees out of pocket to dispose of the home.
  • They simply will take their chances and file for Bankruptcy if the lender does try to collect.
  • They simply will take their chances that the lender will not come to collect and “write off” the loss instead.

While any or none of these reasons may apply to you, it is important to understand every home owner has different levels of comfort and risk tolerance, personal goals, and opinion on the matter. You will always have the chance to review your approval letter with an attorney before selling your home and you can cancel your listing at any time prior to entering into an escrow with a buyer without any fees paid to us.