“Yes” or “No.” That’s how I like questions answered. That’s also how I’d LIKE to answer questions. But so many times when someone asks me a question, I have to say, “Well, it depends...” I’m sure my clients find it incredibly frustrating when I do that, but the reason is not that I don’t WANT to answer the question, it’s just that it really DOES depend on a large number of variables and educated guesses.
For example, for years we had to tell our short sale sellers that if their short sale approval letter didn’t contain “full satisfaction” language that their lender may be able to pursue them for the deficiency after the short sale. But then last year California passed a law that said that in nearly all short sales, the lender is forbidden from pursuing you for the deficiency, no matter what the approval letter said. And there was much rejoicing in the land!
But I’ve recently discovered a new wrinkle in regards to VA and FHA loans. These are both Federal programs. So while the State of California passed a law saying that THEY forbid lenders from pursuing you, there are several legal precedents where Federal law trumps State law. Rut-roh... But then what if your lender issues an approval letter that states they are giving your full satisfaction? Well, VA and FHA are not your lender, they are insuring or guaranteeing the loan. So now the question becomes whether VA or FHA can come after you for their losses? Note that this may apply no matter how they had losses, so this may apply in a foreclosure, too. If you are considering a short sale or foreclosure and you have an FHA or VA loan, be sure to have an attorney review your original loan documents and get their opinion. I AM NOT A LEGAL EXPERT, PLEASE CONSULT AN ATTORNEY FOR SPECIFICS TO YOUR SITUATION.
If you have questions on any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty