Expert, localized Los Angeles answers provided by Heather Roy

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Shortfall After Sale

  after cert. of sale, can original mortgagor be held liable for difference between selling price and prin. balance?
 
 

I don't know if we're talking about a foreclosure or a short sale, and I don't know what agreements might have been made between the borrower and the lender.  But in most cases, after a foreclosure, the lender is entitled to seek a deficiency judgment against the mortgagor for the shortfall. I have the impression they don't usually bother to try.
 In the case of a short sale, sometimes the bank has agreed (in writing) to forgive the unpaid balance.  Sometimes they haven't.

    Edith
Originally published on November 21, 2009
 
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