Legal Question in Real Estate Law in California

Short sale complete, 2nd bank now wants payment

We purchased a house CA as our

primary residence. In early 2007 we

refinanced - a 1st and 2nd to

710k. Lowered our monthly

payment, raised loan value about

15k, and we used the $ to remodel a

bathroom.

In late 2007, our jobs were hit by

the mortgage crisis, we entered

into a short sale with the lenders

through our realtor

Our realtor was in contact with the

banks, told us the short sale

would relieve us of our debt. house

sold as a short sale in July,

2008.

Now the second lender is telling us

we owe the full value of the 2nd

($100,000) as ''unsecured debt.'' I

contacted our realtor, who told us

''they said they weren't going to do

that'' and then emailed us a form

from the bank which they evidently

had before the short sale finalized,

stating that we would be on the hook

for the remainder of the balance.

We never saw the form, it was not

included in the sale documents. We

did not sign this form, however, our

realtor apparently had gotten it,

and sent it to us a week ago.

It appears our options are to A)

negotiate with the second bank to

come to a settlement amount, B) get

a RE attorney to get the realtor into

court and hash it out, or C)

bankruptcy

1 Answer from Attorneys

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