Monday, April 27, 2009

Lawyers say lenders set stage to collect on 'short sales'

This article is unbelievable. Some lenders are inserting language into Short Sale documents that change a non-recourse loan into a recourse loan. This means that the borrower who simply couldn't pay and tried to sell the house in a short-sale would be on the hook for the difference between the loan amount and the amount recovered from the sale, despite the fact that they would not be responsible in any other circumstance. This is coming from institutions that have received bailout money - your tax dollars hard at work.

If you are doing a short sale, make sure you read all the fine print, your nightmare may not be over with the sale. The good news is that most of the banks are taking the language out.....If you catch them.

Scott Dauenhauer CFP, MSFP, AIF