A short sale by definition - is when the lender agrees to accept less than the full principle plus arrears as payment in full in exchange for being paid off right away. The most the lender will usually discount is ten to fifteen percent of the full amount owed. The prudent lender will cut their losses, saving money from being spent on additional foreclosure costs and legal fees versus taking the property back and then having to market and sell the property.
He is your ex- husband. As such, do you have a settlement agreement as to the property division? If so, is that also a court order?
What state are you in?
The stettlement agreement states "husband is responsible for the short sale and any and all debt resulting from the short sale of the residence. Wife is to sign any paperwork necessary to accomplish short sale."
This is stated in the Division of Martial Property Agreement which was stated on the record in court and sign by Judge XXXXX XXXXX
I am in Delaware.
There was no provision for rental income in the settlement.
Then I would let him continue and negotiate such and realize that he might make some money on the issue potentially as I stated above. The only thing I worry about is that what if he isn't able to arange the short sale - then your back into being liable. That's why I would state nothing - at least if the short sale goes through it's over. However, that agreement doesn't account for if the short sale falls through. As such, if it does, then realistically your on the hook and liable.
That agreement should have totally excluded you from any and all liability short sale or not - that would have been certainly better for you.
Realize that he's going to be liable for a substantial portion of that rent or for the monies he hasn't been paying - at that time he better of saved a major portion or he will have been fraudulent.
I would let the matter go but be ready to go back into court about the matter if the short sale falls through.
I very much doubt that they will allow more than a 10 to 15 percent reduction from the amount owed on the mortgage. Too, once a property is in foreclosure - they usually will not accept payments because they have to start the foreclosure process over again - that very well might be why he hasn't paid them - because they won't accept payment.
They can make any demands that they want - they don't have to accept the short sale offer. Too, I've seen short sale offers - that you thought were guaranteed - then the lender bows at the last minute because they changed their mind about the matter.
If you read the short sale agreement - the lender can usually renege on the contract at their whim. So, until the short sale has completely happened - there are no guarantees in the matter.
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