To avoid a deficiency judgement, is short sale or foreclosure better for land?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
To avoid a deficiency judgement, is short sale or foreclosure better for land?
Bought land in AZ for $500K; Current Mtg is $350K; Property Value is $100K. Should I try to sell the land in a short sale or just let the bank foreclose. I want to avoid a deficiency judgement. The mortgage is current but I am out of financial resources to continue to pay. I’ve tried to talk to bank. They won’t talk to me as I am current on my payments.
Asked on August 31, 2011 Arizona
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Whether or not a foreclosure or a short sale is best for your situation depends upon whether or not the loan for the property you own is for your personal residence and is purchase money. A purchase money loan is the original loan in existence when a person buys a home for his or he personal residence.
Many states have laws precluding deficiency judgments where the loan is purchase money and the security is lost in a foreclosure. California recently had legislation take effect in July 2011 stating that in any short sale situation, if the lender receives any money from the sale, that lender cannot go after the property owner for a deficiency.
In your situation you should consult with a real estate attorney to see if your loan is purchase money and if so, does your state have anti-deficiency legislation and short sale legislation like California's precluding a deficiency judgment against the homeowner.
Good question.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.