I am following up on an answer to the following question we received about Alpharetta Short Sale Deficiencies. “We have a first mortgage with EMC. Just got an approval letter on a short sale. NO language in letter that says ”satisfied in full” or words to that effect.
It only says “conditions for EMC’s acceptance of this discounted payoff are X.” Will they sell the note to a collection company and then hound us for years to come?
In part one, we said that in our opinion, you shouldn’t worry about a future deficiency if you have a Fannie Mae, Freddie Mac, FHA, or VA loan. There is one more type of loan where more than likely you won’t have a deficiency.
That is a “sliced and diced” loan. Here is an example of this type of loan. A homeowner gets a loan from Countrywide. That loan is sold to Goldman Sachs along with a thousand other loans.
Goldman then securitizes that block of 1,000 loans. They hire Bank of America to act as the “lender.” Bank of America collects payments each month, does the accounting, and forwards on the money to the owners of the loan. Goldman now has a consistent monthly income stream. Here’s what happens next.
Goldman sells off the rights to that income stream. They sell certificates that represent ownership of part of that block of 1,000 loans. These certificates are very similar to stock certificates that represent ownership of part of a company such as Microsoft or Exxon.
If you have this type of loan, then you are much less likely to get a deficiency. The reason is because the owners of these loans are almost like zombies. Let’s say a certificate owner lives in Albany, New York. Will they chase a homeowner in Alpharetta Georgia for a deficiency judgment?
It doesn’t sound likely to me. The “lender” in these cases, Bank of America, isn’t putting collections as a top priority. They have hundreds of thousands of loans to handle. As a result, many homeowners with these types of loans never get a deficiency judgment.
Let’s say I was short selling a house and I had this type of loan. The lender wouldn’t approve a complete release of future debt. I would still do the short sale, because (in my opinion) the likelihood of a future deficiency is so low.
Even if you demand a complete release, the lenders often can’t grant it. Why? Because your loan has 1,000 owners. It would be impossible for them to get approval of a complete release from each owner. If you are considering a short sale and are worried about the deficiency, then give me a call at (770) 866-2561.
When you contact me, I will research the type of loan you have. Based on that research I can give you my opinion on the deficiency.
The above is my opinion. It is not legal or accounting advice. Please contact a competent attorney or other professional because the circumstances vary, depending upon your situation.
Thanks for reading this, Roland Lorans.
Roland is a real estate agent at Better Home and Gardens Real Estate Metro Brokers.
Phone: (770) 866-2561.
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Roland Lorans specializes in loan modification assistance and short sales in Alpharetta Georgia . Alpharetta Loan Modification Help, Alpharetta Short Sales.