Rodkin on Deficiency Liability in a Short Sale

Readers ask questions, and our real estate expert answers. This week, in a follow-up question to last week’s, a reader named Barry asks if the deficiency in a short sale can be held against both parties on the title if one of them is bankrupt.

RELATED: Rodkin on the Mortgage Balance Left Unpaid in a Short Sale »

Send Dennis your real estate questions at dennis@rodkin.com.

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2 years ago
Posted by CFB

More importantly, if you are negotiating a short sale make sure you have a good attorney working with you so that you are NOT liable for any deficiency balance after the sale of the property. This can usually be negotiated at into the sales contract with the mortgage company. Isn't that the whole point of the short sale? To avoid any deficiency liability? Otherwise why sell? You're better off then letting it go to foreclosure if you're still going to be liable for the deficiency.

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