Deficiency Settlements to Avoid Lawsuits
If you choose to sell your house as a short sale to avoid foreclosure, your mortgage company agrees to accept less from the buyer than what you still owe on your loan. The gap between what was paid for the home and what is owed on your mortgage loan is known as a deficiency. When you do a short sale, there is a risk your mortgage company will seek the deficiency balance. Your mortgage company can file a lawsuit to force you to pay the remaining balance, resulting in more financial hardship.
The Law Offices of Jill Pogach Michaels helps you negotiate with your mortgage company to avoid a lawsuit and negotiate a mutually acceptable deficiency settlement, such as:
Cash settlement: Paying a lump sum of cash is a one of the most successful techniques in a deficiency settlement. The mortgage company is more likely to agree with this as it is guaranteed to get back some of the money that’s been lost.
A Promissory Note: A Promissory Note is a written promise to pay an agreed-upon amount of money over time to the lender. This is a legal contract a lawyer should review.
A payment plan: You and your mortgage company may develop a payment plan that allows you to pay the entire deficiency, or an agreed-upon amount of it, back to the mortgage company over time.