Posts Tagged ‘release of lien’

Question: I know that Idaho allows Deficiency Judgments. I’ve heard that Idaho also has Anti-Deficiency laws and that they apply only to 1st mortgages on a primary residence. Is this true? What criteria needs to be met to be protected by the anti-deficiency law in Idaho?

Answer: - It’s so hard to say because every state is different.  Typically states with anti-deficiency laws apply only to 1st mortgages, and it must be your primary residence.  It may also depend on what type of loan you have.  In Arizona, despite the anti-deficiency law, if it’s a VA loan, they can file a deficiency judgment.  In most cases throughout the U.S., lenders very rarely file deficiency judgments on 1st mortgages, they just take back the collateral.  Lenders in 2nd position are more likely to file deficiency judgments because they are the ones taking the biggest losses.  And even still, most of them will 1099 the homeowner.  One of the best things you can do is have someone negotiate a short payoff or a short sale on your home and have the lender agree to a “satisfaction” which means the lender is giving up their right to go after the homeowner for the deficient amount.   If they only agree to “release the lien” then they still have their right to file a deficiency judgment.

Question: Close to signing a short sale agreement between my first(Countrywide) and second(WAMU). this is a rental, Countrywide has settled, second will accept $7000 to release the lien, however they still want to come after me for the $93,ooo balance. Broker(advocate) was told that WAMU has already charge of the second as bad debt. Can WAMU sell the note to a collector that will still come after us for the full 93,000K. Been advise to try to settle with wamu at an agreed amount and make $100/MONTH PAYMENTS TO LIMIT LIABILITY. Any other questions to consider? If the house goes into foreclosure, Countrywide does a trustee sale are we finished with wamu too?

Answer: The best thing you can do is ask for a satisfaction of the loan.  Ask them how much they need to “satisfy” the loan.  Typically you’ll have to pay more for a satisfaction of loan, but they give up their right to come after you for the difference.   If they’ve agreed to “release the lien” then yes, they can and usually will come after you for the difference.  If the home goes to foreclosure, you can bet WAMU will file a deficiency judgment because it sounds like that is what they are planning to do anyway.  So, no, you are most likely not finished with WAMU.  The best thing you can do is try to get them to accept a satisfaction.  Good Luck.