Chase Bank has recently adopted a new practice under which it will not approve a short sale containing any kind of document containing language requiring that the seller’s deficiency be forgiven. This has come about as a result of changes in banking accounting practices allowing banks to include short sale losses as assets on their balance sheets, as long as the deficiency has not been forgiven.
We have always attempted to protect our sellers’ interest by negotiating forgiveness of the deficiency. However, this approach appears now to be futile, at least with regard to Chase Bank. Other banks may follow. Short sale sellers should be advised accordingly.
Several local real estate brokerages continue to insist on such an addendum. Short sale buyers and buyer’s agents should be aware that short sale approval will not be forthcoming in those instances.
No comments:
Post a Comment