Understanding Deficiency Rights in a Short Sale

What are Deficiency Rights in a Short Sale? 

According to www.thefreedictionary.com the definition of Deficiency judgment is the following:

n. a judgment for an amount not covered by the value of security put up for a loan or installment payments. In most states the party owed money can only get a deficiency judgment if he/she chooses to file a suit for judicial foreclosure instead of just foreclosing on real property.Some states allow a deficiency action after foreclosure on the mortgage or deed of trust. The right to a deficiency judgment is often written into a lease or installment contract on a vehicle. There is a danger that the sale of a repossessed vehicle will be at a wholesale price or to a friend at a sheriff’s sale or auction, leaving the debtor holding the bag for the difference between the sale price and remainder due on the lease or contract.

http://legal-dictionary.thefreedictionary.com/Deficiency+Judgment

A simple explanation of the deficiency rights is the right of the bank/loan party to go after the home owner for the rest of the loan that was unpaid. Many times the deficiency rights can be waived so that the short sale seller does not have to eventually pay back whatever was not paid from the short sale purchase.

If you are in a possible short sale situation and want to get more information about the process, please call us. We would like to help you understand what you need to know about a short sale and if you qualify! We have successfully sold over 350 short sales! Yours may be next!

Jennifer Young Homes

Keller Williams Realty

(703) 774-9572