Legal Question in Real Estate Law in Florida

Can a short sale lead to a deficiency j/ment?

Hi,

if my bank accepts a short sale offer

for my property which is heading for

foreclosure, can they come after me

for the difference between what they

get, and the value of the mortgage?

Of have they agreed to write off the

difference by accepting the short

sale?


Asked on 11/14/07, 9:51 am

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Can a short sale lead to a deficiency j/ment?

This would be a matter of contract interpretation. The short-sale agreement would create a new set of rights and a new relationship, and it seems to me that a properly-negotiated, properly-documented short sale would, or should, eliminate the remaining debt on the note. I'd hasten to add that I can envision sneaky lenders who would bait a trap for the unwary. You should read the documents carefully, and if it isn't clear that they are accepting title and whatever cash you're throwing in (if any) in full satisfaction of the note secured by the deed of trust, you should ask the lender to point it out. If it isn't in there somewhere, then you aren't getting what you bargained for.

I would also expect to have my original note returned to me.

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Answered on 11/14/07, 11:33 am
Edward J. Chandler Law Office of Edward J. Chandler, P.A.

Re: Can a short sale lead to a deficiency j/ment?

This is negotiable with the lender and they can also issue a 1099 to the IRS as forgiveness of debt.

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Answered on 11/14/07, 11:51 am


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