Hopefully none of you are facing a Shortsale or Foreclosure. But since it is quite common these days, I ran across this and thought it is good info to know.
Legal Hotline Q & A by Brad Boyd, Esq.Thomsen, Nybeck, P.A.
Q: What is the borrower's liability for repayment of a promissory note after a short sale has been closed?
A: This will depend upon whether the short sale has included a negotiation with the lender(s)/creditor(s) that any outstanding portion of the debt that will not be paid from the proceeds of the short sale is forgiven or satisfied. If a release of mortgage is issued, without more, the terms of the promissory note and debt owed remain unsatisfied. Sellers should be very proactive in identifying whether short sale approval from the lender includes a "satisfaction" of the outstanding portion of the debt.
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