Legal Question in Real Estate Law in Virginia

Re: Short sale of mortgage

The first thing you should do is contact www. Mortgage Fraud Examiners .com and get an audit to see if your mortgage is INVALID and defective because of mistakes that the lender may have made in technical details of the mortgage paperwork.

They do charge a hefty fee, and that could be an obstacle for you.

However, I don't entirely understand your question.

You should most certainly NOT sign any paper admitting that you owe anything. This can affect the statute of limitations (although in your case, if you are not yet in foreclosure it probably won't make any difference).

The only thing(s) you should sign are documents taht simultaneously release you from any further responsibility. (However, there may be times when you simply have no choice but to accept that you are going to have some future responsibility and you may have to limit the damage. Just make sure you know what you are signing.)

I don't know what it means that the bank "will charge off the balance and after the sale someone will contact us for a settlement,"

That sounds self-contradictory and like double-talk.

Of course you may not be in a position to demand anything at this point, and it might be in your best interests to let the short sale go through, regardless of the consequences.

The greatest danger of going to foreclosure is that the house will probably sell for far less money, and then you will be responsible for the balance which will be MORE money if the house sells for less.

But I would try to push for a "settlement" whatever that means" at the same time, or at least an understanding -- in writing -- of what is going to happen.

It sounds to me like the "settlement" they are planning to talk to you about later is you paying them the remainder of the balance of the loan.

However, as I said, that might be the best you can do compared with a foreclosure auction likely to bring in very little money, and to cause greater losses.

I think you should have a lawyer read over whatever you are bieng asked to sign and what is going on.