2nd Mortgage (HELOC) Deficiency after short sale

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1. Licensed in CA

   

   Pamela Koslyn

   Los Angeles Business Attorney

   Contributor Level 20

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   Answered February 14, 2011 12:07. If you've already settled with the 2nd lender and they've released the lien, did they not also agree to release you, the borrower, from any deficiency? What exactly did you get for the $12,000 you paid them last August when you short sold the house? You need to review that short sale approval letter and see if you inadvertantly allowed this lender to reserve their rights against you, or had no choice because they wouldn't agree to the short sale otherwise.
   
   HELOCs are not non-recourse loans, even if they're secured by the house, so this lender would still have the right to prusue this debt if they haven't bargained it away.
   
   See a real estate lawyer for help.
   
   Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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2. Licensed in CA

   

   Shawn Jackson

   Cotati Business Attorney

   Contributor Level 15

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   Answered February 14, 2011 10:15. Well, let's start with the writtend and signed documents. What did documents did you sign surrounding the default and notice disclosures you received? Often times, the "negotiation" for not pursuing a deficiency judgment occur in these documents. Yes, you will want to engage an attorney to review and respond to the "requests" from the bank....let us know if we can be of further assistance...
   
   By Grace...
   Shawn Jackson ESQ.
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