Solving the Knoxville Foreclosure Crisis
One Homeowner at a Time

Rick Smenner

RE/MAX Preferred Properties
[email protected]

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Knoxville Short Sales Question – Will My Lender Waive The Deficiency?

Knoxville Short Sale Roller Coaster RightIn our Ask the Expert Section, we recently received a question from Conrad, he asks, "I'm doing a short sale on my Knoxville home. I owe about $60K more on my Knoxville home than it is worth. I'm more than a year behind on payments and just started to get back on my feet. I'm afraid that my lender will pursue me for a deficiency judgment after completing my short sale is complete. Is there any chance my lender will waive their right to pursue me for a deficiency judgment?" Every Knoxville short sale is a little bit different. There are many lenders that are willing to waive their right to pursue you for a deficiency judgment. In a majority of short sale we close, we are able to get a lender to waive this right. A lender outlines how they will handle the debt owed in a short sale approval letter. In many cases, lenders will use terms like "forgiven" or "agrees to release the debt" in a short sale approval letter where they do not intend to pursue a homeowner for what is still owed on a Knoxville home. If you have questions over how the debt will be handled, I always suggest speaking with a trusted attorney for further clarification. In order to approve a short sale sale, lenders require a great deal of documentation. They want to see that a short sale is your only option, which is why in most cases they won't pursue you for a deficiency judgment. They know you've been in a difficult situation, which is why they know it is not worth pursuing you for a deficiency judgment. In some cases, a lender may require you to sign a promissory note, where you come up with a payment plan to help repay some of what is owed. When a promissory note is signed, the payments are small enough to ensure a homeowner is able to make them. Are you underwater on your Knoxville home? Do you want to hear what options you have to avoid foreclosure? If so, please do not hesitate to give my team a call at 865-696-9002 or send an email to [email protected]. We’ve helped countless Knoxville homeowners avoid foreclosure. Give us a call today for a free consultation.

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