Are Lenders Seeking Money From You After a Short Sale?
No doubt that banks are pursuing people who have short sold their homes for the deficiency, or the difference between what they owed to the bank and what the house short sold for. I recently attended the Orange County Bar Association Real Estate Section monthly meeting, where broker David Silver-Westrick spoke on short sales. Among the discussions that came out of the presentation was the failure of agents to properly advise their clients as to the legal implications of short sales.
While real estate agents cannot practice law, they have a fiduciary duty to their clients and should advise them to seek proper legal counsel when there are legal issues involved. At the very least, agents are not reviewing the release paperwork from the banks or do not understand the implications of certain language, which may leave the seller on the hook after the sale.
If you’re underwater and short selling your home, please make sure you seek competent counsel. If you’ve short sold your home, did you seek legal advice? Are the lenders contacting you for the deficiency?
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