Chicago IL – Most short sales will end up in your walking away owing nothing. However, some lenders will not release you. They have firm policies in place and will not change them for any reason. Here is what you can do in this situation.
If it comes down to it, short sell your property and accept the deficiency. Then simply don’t pay on it. Inertia and the bank’s disorganization will be on your side. Here is an inside secret.
It is very hard for the lender to collect from you. Sure, they can drag you back into court. But, that takes time and lots of money paid to a lawyer. The fact is, the American Legal System is designed to protect the borrower.
A full time debt collection firm who buys defaulted Home Equity Loans, admitted in the New York Times that it is hard to collect deficiencies. This is according to an article in the New York Times. Clark Terry, the chief executive of Utah Loan Servicing, said the most he will pay for an defaulted home equity loan is $500. Why is that?
Because they are so hard to collect on. “Anything over $15,000 to $20,000 is not collectible,” he said. The article where I found this is “Debts Rise, and Go Unpaid, as Bust Erodes Home Equity, published August 11, 2010 in the New York Times.”
The lenders (and debt buyers) know it will cost them $2,000 going to court to perfect their judgment. After that, most people will simply declare bankruptcy and not pay them a dime. That fact makes the banks very reluctant to pursue you legally. Here is the other thing on your side.
It’s simple inertia. The lenders and debt buyers deal on a volume basis. They know that if they use simple collection techniques, a certain percentage of people will pay. They don’t have time to go thru every single loan and implement every single collection technique.
So they do what they can. Their most effective, low cost collection technique is phone calls. They setup special phone software that allows their collectors to talk to 15-20 people an hour. That gets some people to pay.
These same principles work for all sorts of debts. It will work for defaulted credit cards, defaulted second mortgages, and other people attempting to collect from you. In the next post, I will lay out the process you can use to avoid paying this debt back.
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.
Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. firstname.lastname@example.org.
View My homes for sale at www.BetterLivingRealty.com.
Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor.
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