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Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 53685
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I live in Florida and have a 1st & 2nd mortgage with Green

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I live in Florida and have a 1st & 2nd mortgage with Green Tree. My 1st was modified 5-12 with a approx. $194k balance. The 2nd has a $46k balance. I haven't paid since 7-11. I recently lost my job, the house is approx. $100k underwater. I want to do a Short Sale on the property but have been told its not a sure thing. I'm talking with Spartan Properties LLC who is willing to give me $3000.00 to sign the property to them. They gave me a Trust and Real Estate Purchase and Sales Agreement to review and sign. I don't really understand it. They told me to call them with any questions I might have but because I don't understand it I'm not sure what to ask them. They told me they'd be taking over my payments yet the document says "...The Seller will not be released from liability on the existing mortgages or mortgage note." I am moving to NY at the end of August and REALLY need the $3000. Any suggestions? Thank you
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. You don't want to do this because it does nothing to release you from your liability. And, once you've given up title to the property, you lose all your leverage with the lender to negotiate a deed in lieu of foreclosure. Since one lender has both loans, a deed in lieu if very possible. Florida, unfortunately, is a deficiency state...which means the lender can pursue the borrower for the deficiency...i.e., the amount owed on the loan in excess of the amount of the foreclosure sale. Whether or not they will depends upon their assessment of the collectibility of a deficiency judgment. So, if you can convince them there is nothing for them to get, and that if they were to pursue a judgment, you would simply file for bankruptcy protection and get the judgment discharged—and even if you have no intention of doing so, it is still good leverage with the bank because they do not know whether or not you would… then it is unlikely the lender will spend the time and money necessary to get a judgment they believe is uncollectible in the end. Given the foregoing, you are far better off to contact your lender and propose a deed in lieu of foreclosure. A lender would generally be willing to do this because the a deed in lieu of foreclosure saves the bank the time and expense of foreclosure. If the bank doesn't agree to a deed in lieu of foreclosure with the bank (where the bank accepts a deed in exchange for releasing you from the loan), then let the bank foreclose and walk away.

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Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help! For easy access, my bookmark is:

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