Kirk Adams : Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question. I'll be glad to assist. Customer:
Thank You Kirk!
Kirk Adams : If you can get a short sale approved, that would be the next best thing, but the only problem is getting a buyer and having the sale approved before the foreclosure sale occurs.
Kirk Adams : Also, you would want the lender to agree to accept the short sale as full satisfaction of the mortgage so they don't seek a deficiency judgment. Customer:
Well, when I spoke to the bank today, they said I should try to sell the house or find a realtor to do a short sale. Honestly Kirk, I am just frustrated with the whole thing. What would be the consequences of just letting go vs bankruptcy
Kirk Adams : If you just let the property go, it opens you up to be sued for a deficiency judgment - - the difference between what the house's fair market value is and what you owe (42 Pa. Con. St. Ann. § 8103[a]).
Kirk Adams : That's the only threat to allowing things to proceed, but if you think there may not be a deficiency, it may make no difference (but if a short sale is in play, there's likely a difference between what you owe and the FMV.
Kirk Adams : If you were to file bankruptcy, you could avoid the deficiency and have the debt discharged.
Kirk Adams : You could always let the foreclosure go through, and IF the lender ever files for a deficiency judgment, you could file bankruptcy at that point nd have the det discharged.
what would you say would be most detrimental for me in the end?
or does it matter at this point?
Kirk Adams : Facing a huge deficiency judgment is the worst outcome - - because you still owe the money even though you no longer have the property/asset.
Credit wise, does it all affect me the same?
Kirk Adams : But, like i said, you can always wait to see if the lender seeks a deficiency judgment agianst you (you'll be served just like with a regular lawsuit), so you'd have time to file and stop it.
Kirk Adams : Credit-wise, there's not much difference. A judgment or a bankruptcy is going to stay on your record for at least 7 years.
I see. If you could give me advice what do you suggest based on the options?
Kirk Adams : If you can do a short sale and have the deficiency waived through the short sale agreement, that would be best.
Kirk Adams : BUT, if that doesn't work out, it's probably best to let the foreclosure happen and if they seek a deficiency, then file bankruptcy.
Kirk I want to thank you greatly you don't know how much I appreciate it. I just was not sure of my options or what to do after being denied. Finally, do you think that a realtor would be able to degotiate that or should I?
Kirk Adams : Do you mean negotiate the short sale?
Yes and seek to have the deficiency waived
Kirk Adams : The realtor can negotiate the sale, BUT you'll have to deal with the lender to set up the short sale agreement and deficiency being waived.
Perfect thanks Kirk!