Getting a short sale approved can be an exciting thing for a short sale realtor, however one mistake that some commonly make is getting excited before reading the fine print of the approval letter. It’s important for the short sale realtor to thoroughly read the approval letter from the bank because sometimes there are stipulations to the approval of the short sale; the approval letter outlines whether or not the lender will have the right to come after the homeowner for the deficient amount once the short sale is closed. If the deficient amount is fully forgiven, the letter will usually state that the lender waives all deficiency rights, meaning they can’t sue the homeowner in the future. The tricky thing with approval letters, however, is that whether or not the lender waives their deficiency rights isn’t always stated clearly.

There is currently a bill moving through Congress (House Bill 2614), however, stating that a lender must clearly state in the approval letter whether or not they are going to waive their deficiency rights or not. Although this bill isn’t in effect yet, some short sale realtors in San Diego are taking advantage of this bill already. If the approval letter doesn’t clearly state whether or not the deficiency rights are waived by the lender, some short sale realtors are writing the lender back, asking for the deficiency agreement, and noting House Bill 2614 in their letters.

Most short sale realtors always strive to have the deficiency amount fully waived when doing a short sale. It gives the homeowner better piece of mind for the future because they don’t have to worry about past debt coming back to haunt them. House Bill goes into effect on June 7th; if you are currently working with a short sale realtor be sure that they are aware of House Bill 2614 and how it could affect your short sale approval letter.