Posted on: 21st Mar, 2009 11:46 pm
I am in the process of trying to short sell my house in Virginia. I am waiting on a response from the bank on an offer that will leave me about $60k short on payoff. I only have the first mortgage with VHDA.
I was told by a friend who is a realtor (not my realtor in this case) that I may have to sign a promissory note for all or part of the 60k for the short sale to be approved. I have no assets or ability to pay as I have been unemployed for several months. Does it make sense to sign a promissory note? And what can they do to collect on it? Can they garnish future wages or get a judgement in the future?
I appreciate any advice you can give.
Mike B.
I was told by a friend who is a realtor (not my realtor in this case) that I may have to sign a promissory note for all or part of the 60k for the short sale to be approved. I have no assets or ability to pay as I have been unemployed for several months. Does it make sense to sign a promissory note? And what can they do to collect on it? Can they garnish future wages or get a judgement in the future?
I appreciate any advice you can give.
Mike B.
Hi MikeB,
In a short sale the deficient amount is not forgiven by the lender. You are supposed to pay it off. That seems to be the reason why you may be asked to sign a promissory note whereby you will make a written promise to pay it off. If you do not pay, the lender may get a judgment against you and garnish your wages.
Thanks,
Jerry
In a short sale the deficient amount is not forgiven by the lender. You are supposed to pay it off. That seems to be the reason why you may be asked to sign a promissory note whereby you will make a written promise to pay it off. If you do not pay, the lender may get a judgment against you and garnish your wages.
Thanks,
Jerry
How is the deficient amount computed? Is it considered the difference between:
1) The fair market value of the home and the offer; OR
2) The principal left on the note and the offer?
1) The fair market value of the home and the offer; OR
2) The principal left on the note and the offer?
Welcome Guest,
When you short sale the property, the sale price of the property is less than the principle balance left on the mortgage. The difference between this two is known as the deficient amount. After the short sale, you need to pay off this deficient amount to the lender.
When you short sale the property, the sale price of the property is less than the principle balance left on the mortgage. The difference between this two is known as the deficient amount. After the short sale, you need to pay off this deficient amount to the lender.