Solving the Knoxville Foreclosure Crisis
One Homeowner at a Time

Rick Smenner

RE/MAX Preferred Properties
[email protected]

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Knoxville Short Sale Question: What Happens To The Money I Still Owe?

imagesIn our Ask the Expert Section, we recently received a question from Alfred, he asks, "I've decided to do a short sale on my Knoxville home, but am a little bit afraid of what might happen in the future. I've heard that my lender can still pursue me for what is owed on my Knoxville home. I've drained my savings to try and save my house, so I couldn't afford to pay anything. If I do a short sale, what happens to the money I still owe?" Alfred, I'm very sorry to hear about your situation. You ask a very valid question about Knoxville short sales. As a Knoxville short sale agent, I always encourage my clients to seek advice from a legal counsel. I am, though, able to explain a few different scenarios which can occur with a short sale. In many Knoxville short sales, my team and I have been able to successfully negotiate a short sale and get the lender to agree not to pursue the homeowner for a deficiency judgement. This is always the most ideal outcome of any short sale. It gives the homeowner time to plan where they will move and get back on their feet. In some cases, lenders will approve a short sale under the condition that the seller sign a promissory note. This condition can come from either the lender or the mortgage insurance company, that they’ll forgive the debt, but make the seller pay some of it back. As far as the amount of the promissory note, it really all kind of depends. The amount is determined by the lender or mortgage insurance company. It truly depends on how much debt is owed and how much the home sold for. Payments are often made interest free and are small enough that the homeowner can afford them. There are certain scenarios where a lender will pursues a Knoxville homeowner for a deficiency judgment, or what is still owed on the home. This varies by state laws, but in the state of Tennessee lenders are able to to pursue homeowners for a deficiency judgment. It is important to keep in mind that deficiency judgements are rare, and it takes a lot of effort and legal fees for the lender to do. In addition, a foreclosure puts you at risk for this as well, Knoxville short sales come with a better chance of avoid a deficiency judgment. Are you facing foreclosure on your Knoxville home? If so, please do not hesitate to give my team and I a call. We’ve helped many Knoxville homeowners avoid foreclosure on their Knoxville homes. Give us a call today at 865-696-9002 or via email at [email protected]. All of our services are done at absolutely no cost to you.

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