Hi, My name is XXXXX XXXXX I will be assisting you today with your question,
Please give me a moment to research New Mexico law and how deficiency judgments are handled and I will be back to you shortly,
Lenders in New Mexico can and do get deficiency judgments when the sale of the property does not satisfy the original mortgage loan. You can avoid filing bankruptcy, however, if you can do one of two things.
1. You can try to convince the bank to accept the proceeds of a short sale as payment in full of the outstanding balance of the mortgage loan; or,
2. Convince the bank that it will save money in Court costs and Attorneys fees if they agree to accept a "Deed in Lieu of Foreclosure". This situation arises when the lender agrees to accept a deed to the property instead of going through foreclosure proceedings.
Both options will need the cooperation of the former spouse, but you might be able to convince her by telling her that if she fails to cooperate, you will file a Petition for Contempt against her,
I realize that this is not exactly the Answer you were hoping for and it would have given me great pleasure to give you the Answer you wanted to hear, but I have an ethical obligation to you to give you only correct Answers and information, so I am respectfully asking that you not hold the New Mexico law applicable to your situation against me,
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Don't you have to have low income to qualify for a short sale? We are not low income, but we also cannot afford 2 mortgages anymore.
Thank you for your follow up question and the opportunity to explain further,
No, there is no "low income" requirement for the lender to approve a short sale. The only requirements are that the outstanding balance of the mortgage loan is greater than the fair market value of the property and that when sold, the proceeds will not be enough to satisfy the mortgage loan balance,
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