Posted by Rich-CA on April 24, 2007 at 18:39:01:
No. That would only be true on a non-recourse loan - one where they only have rights to the proceeds of the property to pay back the loan. Virtually all residential lending these days are recourse loans - which allows them to sue for the shortfall from your remaining assets.
true or not - Posted by bob
Posted by bob on April 24, 2007 at 17:57:17:
On an original loan, If the property sells for less than the original purchase price. (short sale) The lender must (by law) accept that as payment of the borrower’s obligation.
Re: true or not - Posted by BTI
Posted by BTI on April 25, 2007 at 13:12:29:
Bob
Just to add to Rich’s post. Don’t know what state your in but no matter which state your in, part of the deal should be an agreement by the lender not to pursue any shortage.
And in California if this is their home, part of the leverage with the lender is the fact that if the property goes to foreclosure the lender cannot go after any shortages after the sale by law, so lender gains nothing by not co-operating.
BTI