foreclosure deficiency judgment georgia
Can lender sue for deficiency judgment in Georgia?
A friend sold his home in Georgia via Short Sale. He was told by Bank of America that they will not pursue any deficiency judgment on the 2nd loan and that BA will give him 1099C. But the problem it is verbal and not in writing and the house got sold. And now BA is demanding him to pay $140k which he did not have. He lost his job and no means to pay the money. BA denied telling him that they will not pursue the debts but he was told on the phone and he did not get the name, email, I guessed he wants to get rid of the house and never thought of getting it in writing. Any real estate lawyers in the house, foreclosure experts in the house. Your advice is greatly appreciated.
Thank you
Are deficiency judgments permitted in Georgia?
Yes, adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. The lender must seek a deficiency judgment within thirty (30) days after the foreclosure sale. The foreclosure sale must be confirmed.
Two Pitfalls in a short sale
TWO PITFALLS TO AVOID IN A SHORT SALE
There are two different methods a lender can go after a home owner for owed funds, after the sale of their home. The two methods the lender does not want the borrower to know about are a deficiency judgment and a 1099.
DEFICIENCY JUDGMENTS
In order to recoup any shortfall in the amount bid, including attorney’s fees, court cost, and accrued interest charges, the lender must file a deficiency judgment. A deficiency judgment is defined as a judgment that has been issued when the collateral for the loan is inadequate to satisfy the lender’s debt completely. In other words, a judgment is issued against the party being foreclosed on to recover any shortfall in the amount owed to them. A deficiency judgment is issued when real property is sold at auction for less than the amount owed on the lien. For example, if a house was sold at auction for $ 160,000, but the amount of the loan balance was $ 180,000, than a deficiency judgment could be issued for the shortage, or deficiency, which is $ 20,000 in this example, In summary, deficiency judgments are issued by court action in favor of a lender to help them recover any amount not collected at an auction sale.
MORTGAGE FORGIVENESS DEBT RELIEF ACT
Until recently, if a lender approved a short sale, the IRS required the lender to submit a Form 1099 for the amount of the loan it forgave. In other words, if a lender accepted an offer of $450,000 a loan of $475,000, the difference of $25,000 was considered income and subject to tax. That changed in December 2007 when President Bush signed into law the Mortgage Forgiveness Debt Relief Act. At least, it changed for sellers who short sell their primary residence. Sellers who short sell a second home or investment property can still expect to receive a 1099.
HOW WE CAN HELP
My company has a 98% success rate of getting deficiency judgment waived against the borrower. Our company policy is to help the seller first and give them the option if we are unable to obtain a full satisfaction whether to proceed with the foreclosure or accept the deficiency judgment.
Contact We-Buy-Houses-Atlanta-Gerogia.com
About the Author
We buy houses in any condition and any area of Atlanta Georgia. We Buy Houses Dawson Ga.
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foreclosure deficiency judgment georgia
