Deficiency Judgements

Foreclosures, Short Sales, Tax Foreclosures
1

I’m working on a short sale, and this is one area that I’m a little weak in. I’m looking to get some advice on wording (I’m also waiting for my lawyer to get back to me) of a disclosure letter.

The bank has 2 options right? 1099 & deficiency judgement.

What are the ramifications of each, and laymans way to explain it to the seller.

Thanks for your help.

Dave

2

There is also a third option. The lender can ask the owner to sign a promissory note to pay back the deficency over a specified period of time - usually with no interest. The 1099 is the prefered option!