Balance due on 2nd loan after short sale

samfaith143 · Joined: 26 Oct 2009 Posts: 1 1.35 Dollars($)

We recentely sold our home in Oregon through a short sale. We were under the impression that a short sale allowed you to sell your home for less than the balance owed and the balance would be forgiven after an offer was accepted from the bank and closed. When we purchased our home we had 100% financing, so two loans a 1st & 2nd. The bank is now trying to collect on the remaining balance on the 2nd. Is there any way out of paying the remaining balance? Any laws that we are not aware of? If we had the money to pay the balance we would have been able to sell the house without a short sale. We cannot pay this amount. Any suggestions?

jenkin7 · Posted: Tue Oct 27, 2009 12:04 am Post subject:

Hi samfaith,

You remain responsible for the balance of the loan amount owed after a short sale. The lender can come after you for the balance amount, can get a deficiency judgment against you. There are anti-deficiency laws in certain states. But these laws primarily apply to purchase mortgages, not to second mortgages or home equity loans. However, you have the option of negotiating with the second lender and settle the debt for less than the amount owed.

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