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I need advice. Foreclosure/ShortSale/Loan Modification for land that is 10% of loan amount?

Miami, FL |

Saw many articles from Margery Golant. Wondering, if you can advise. What is the likelihood of deficiency judgment. I'm with WF. The land is worth 10% of loan amount, so 10000 to 100000. What should I do, Modify Loan/ShortSale/Foreclosure?

I am working with the bank on a loan modification. Probably unable to show hardship.

Please can you help.

Attorney Answers 4

  1. No one can tell you the likelihood of a deficiency judgment in your particular case. If Wells Fargo seeks a deficiency judgment from you then the likelihood in your case is 100 percent.

    I recommend that you speak with a local foreclosure attorney about your options. You may be able to get a waiver as to all or part of the deficiency with a short sale, even with no evidence of hardship. In addition, a good Realtor will be able to assist in exploring all short sale options and programs. Good luck.

  2. I agree with the prior answer. It is very unlikely that you were completely unaffected by the economic crisis. Everyone has a hardship, it just may take some counseling to find the correct way to phrase it to the lender.

    This answer is provided without full consultation and is suggestive in nature and not to be considered legal advice without entering into a formal legal engagement with an attorney. Before you decide, ask any lawyer to send you free written information about their qualifications and experience. This answer is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

  3. I agreed with the other answers. Although, the real answer is all three. You should be attempting to modify, while looking for a short sale buyer, and making notes and gathering records to present as many defenses as possible at a foreclosure.

    The law is complicated and although the facts expressed may seem to be all that is relevant, there may be many other important facts to consider. Also, the law is constantly undergoing change, so what may be correct today, may not be accurate tomorrow. Only a full consultation with an attorney experienced or knowledgeable in the specific legal subject matter is likely to result in the optimal course of action. My practice has entailed more than a 30 year span of many real estate, personal property, and bankruptcy issues. Find out more about me at:

  4. As you state in your question that your property is "land", you have not indicated if this is an undeveloped residential lot or a commercial property.

    Under the Mortgage Loan Forgiveness Act, if this is a residential lot that you had planned on building your primary residence on, it might fall under the Act. The significance of this, is that if you short sell the property, or if it gets foreclosed, you might not be liable for a deficiency.

    On the contrary, if this is commercial land, or is a lot you purchased for investment, it likely would not be covered under the Act. With a short sale, the lender may file a 1099c- which is a Cancellation of Debt, where the IRS could count the forgiven debt as taxable income to you.

    With a loan modification, you would not need to worry about a deficiency.

    Additionally, you did not state what caused the property to drop 90% of its original value. You might have some recourse, or a defense within this issue.

    With all of these scenarios and possible outcomes, you need to review this matter in detail, with an attorney.

    This information is for education purposes only and is not to be relied upon as legal advice, legal opinion or as a complete answer/information to/for this discussion. You should always seek competent legal advice from a licensed attorney in your area for help with your specific legal question. No attorney - client relationship is created, intended or should be construed upon from this general discussion.

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