Legal Question in Real Estate Law in California
Is there any statement a short sale approval/demand settlement should state to ensure that the mortgagor is fully discharged from the delinquent loan and debt? The document currently reads "Mortgagor contribution: Cash at closing : 0.00. Promissory Note: 0.00."
The document also reads, "As agreed, when we reeiceve the sale proceeds and all required documentation, we will notify the credit bureau to reflect 'agreed settlement short of full payment,' which would appear on the credit report within 60-90 days from the sale date and within 60-90 days from the date of notificiation and waive any deficiency rights, if applicable." Am I correct in reading that these statements will bar the bank from attempting to collect any delinquent payments or debt in the future from this loan after the short sale has been finalized. ???
2 Answers from Attorneys
Who's "we?" In other words, who is waiving their deficiency rights, you or the lender?
Seems fairly clear to me that "we" must refer to the lender, since borrowers don't do those other things that "we" is agreeing to do, such as notifying the credit bureaus. I would feel reasonably comfortable with the quoted language, if this is a reputable lender, in that it is placing itself in a position where any attempt to go after a deficiency would seemingly place it in a very uncomfortable position in court, before a jury, trying to make a case that somehow it had not waived its right to a deficiency. If you or your broker or your lawyer had a choice in the matter, somewhat more express language might be better, but this seems to do the trick.
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