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N Cal Attorney
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Category: Real Estate Law
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Experience:  Since 1983
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I am short selling my house and my realtor just sent me the

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I am short selling my house and my realtor just sent me the documents of the terms of sael . My concern of course is the deficiency waiver (Nevada is not a deficiency waiver state) Here is the exact language that is in the document. AM I safe from further legal action, judgement, etc. Thanks you for your assistance. Jay McCrary p.s. If you need additional info , please advise and i will try to assist URBAN TRUST WILL REPORT THE LOAN AS “SETTLED” (LOAN PAID IN FULL FOR LESS THAN THE FULL BALANCE) TO THE APPROPRIATE CREDIT REPOSITORIES SUCCESSFUL SHORT SALES DO NOT ALTER PREVIOUSLY REPORTED PAYMENT HISTORY OR ANY NEGATIVE CONSEQUENCES THEREOF IN ACCORDANCE WITH IRS REGULATIONS, URBAN TRUST BANK WILL REPORT A 1099 C"CANCELLATION OF INDEBTEDNESS FOR THE DIFFERENCE BETWEEN THE UNPAID PRINCIAPL BALANCE AND THE AMOUNT OF THE SALES PROCEEEDS.

The reference to the 1099-C means they are waiving the deficiency.
"Banks cannot legally come after you to collect any deficiency once they have issued a 1099-C"
"In the past, homeowners using short sales or deeds in lieu were required to pay tax on the amount of the forgiven debt. However, the new Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 3648) changes this for certain loans during the 2007 through 2013 tax years only."

I hope this information is helpful.
Customer: replied 3 years ago.

thank you for your prompt response for clarification purposes my concern is the language stating that the loan is settled how will that impact or bi injurious to what extent injurious to my creditand since they are publicly reporting the loan as settled that means that they cannot come after me for any judgment on the deficiency also correctyou stated that the issuance of the 1099 prevented them from going after the deficiency which is great news but I just wanted to clarify if there was any wiggle room for them in the term "settled "thanks again for your assistance

Reporting the loan as settled and filing a 1099-C means they cannot get a deficiency judgment, but frankly I do not know how this would appear on your credit report other than that the loan was extinguished.

A short sale should not be as bad for your credit as a foreclosure, but different agencies rate them differently and some rate a short sale the same as a foreclosure, see
although this may change soon, see
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