Recourse vs. Non Recourse Loans
Here is a video/podcast from Oct. 6th 2009. 5 Short Tips on short sales:
Charles McMillan 2009 NAR President interviews 2009 President-Elect Vicki Cox Golder on what homeowners need to understand about short sales. There are unique tips like talking to a HUD counselor or finding one on the website hopenow.com.
There are many great tips on this video, I’d like to leave you with one of the tips to consider more research on, and that’s recourse vs. non recourse loans. As a general rule in the state of Minnesota, the lender who initiates the foreclosure (Typically the 1st lender) has waived their right to a deficiency under Minnesota State Law, and this would be something a short sale negotiator should work with the lender on.
The concern for the seller is the recourse loan, or a possible deficiency on the 2nd mortgage in the above scenario as that lender didn’t initiate a foreclosure. This is where it helps to work with someone like our team that knows how to close in a unique way to receive payment from the transaction to work on getting The satisfaction with the 2nd lender so that it’s to the seller’s benefit. Your goal as the homeowner is to avoid a deficiency judgment for the difference of what is owing on the loan originally to the amount it sold for, or the lender loss on the transaction. The above scenario is a very standard scenario, but it is not considered legal advice in any way, as we are not an attorney.
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December 2nd, 2009 at 3:44 pm
This video is well layed out, and explains how to best convey the message of the importance of a short sale to a seller.