Legal Question in Real Estate Law in California

Re: Short Sales

There are a feww things to watch out for. (1) promissory notefor the remaining balance. (2) The people making the agreement for the short sale (and I can only assume reduced price) are the owners of the original promissory note and not just the holders. Only the owner is authorized to make the agreement to take a lower amount.

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Re: Short Sales

Attorney Linden is correct. You need to be careful because virtually all lenders will attempt to give you authorization for a short sale in which they retain the right to pursue you for the "short" after the sale is completed. Remember - even though they let you sell the collateral (the house) without paying the loan in full, they still retain a signed promissory note from you for the full amount, and technically, after the house is sold, that promissory note is still valid and enforceable (less what the house sale yielded to them). As such, you generally won't even necessarily be asked to sign a new note - the old one is still valid. You need a full and complete release from the obligation under the note at the time of the short sale. You stand a better chance than many because the difference between what you owe, and what they net in the sale isn't that great. You should, however, consult with someone about the specifics of your case.

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