Chicago Short Sales: A Short Sale Lender’s mindset on deficiency judgments

Posted on August 6th, 2010 in Financing, Market Conditions, Other Real Estate, Short Selling/Buying.

Chicago IL – This is a continuation of a theme about how the lender’s view short sales. Are you trying to avoid a deficiency judgment? If so, then you need to be careful about how you present yourself to your lender.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

A lender will usually be ok with letting a broke borrower walk away without a deficiency judgment. But, if they think you have lots of money sitting around, they are going to want some of it. They feel that since they are losing thousands of dollars, then you should pay them back.

(Fortunately you don’t have to worry about a deficiency if you are one of two people. Category A: You are genuinely broke, or just barely scraping by. Category B: Your lender is FHA, VA, Fannie Mae, or Freddie Mac. They usually let borrowers off without a deficiency.)

If you fit into Category A, then make sure everything you send to the lender documents that you do not have extra money. Your hardship letter should state that you only have enough money for basic living expenses.

Your financial statement should show that your monthly payments are higher than your monthly income. For example, you might show a monthly income of $4,000. You will want to itemize all your expenses and make sure it adds up to $4,000 (or more.)

Add in every single expense you can think of. Entertainment, cable TV, daycare, medical bills, life insurance, credit cards, auto maintenance, food, electric, water, all utilities, phone, cell phone, etc. The list could go on and on. The point is, make sure you add in everything.

This will show the lender that you don’t have the extra money. You simply can’t afford to pay them $300, $400, or $1,000 a month. The lender will see that. They will be more likely to approve the short sale and let you walk away owing nothing. I’ve got a lot more info on short sale deficiencies. If you have a question about short sale deficiencies, please e-mail it to me at

Are you interested in selling your property as a short sale? Call me at (312) 953-6725 for a free consultation. When you call, I will explain how the process works in detail and answer any questions you may have. Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Chicago loan modification kit has the instructions you will need to get a loan modification approved with your lender.

Thanks for reading this, Phil Buoscio.

Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..

Phone: (312) 953-6725.

View My homes for sale at .

Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. ChicagolandShort Sale Realtor. Chicago IL Short Sales.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved.  29K77M26DWQB