Attorney Throws Homeowner Under Bus

17Sep09

j0434819One of our Realtors has been working with a Buyer that has an offer on a Short Sale that is listed with another Realtor. The Seller’s bank approved the sale. WoW! That’s like winning the lottery! We specialize in Short Sales, and I tell you, they are a LOT of work. And lots of frustration & heartache for everyone….except for the Seller’s bank – they’re usually the ones creating the frustration and heartache. Even when a Realtor is experienced with loss mitigation, there is no guarantee that a Short Sale will be approved by a mortgage company. There are so many Realtors out there that are not experienced in Short Sales, but list them anyway, that I feel when they actually get an approval for a Short Sale, it’s a MIRACLE.

So, here we have this miracle of a Buyer actually buying a Short Sale property, and guess what happens? The Seller decides to go see an attorney. Great. She SHOULD talk to an attorney. I encourage our Sellers to talk to an attorney and/or CPA, especially if it’s a Short Sale. But not Aunt Ethel’s Divorce Attorney. Not the Attorney on the bar stool next to you. Not your nephew that just passed the bar exam. I’m talking about an experienced REAL ESTATE ATTORNEY. I don’t know what kind of attorney this woman talked to, but do you know what he told her? “Just let it go into foreclosure.”

What the…WHAT? This is not the first time I’ve heard of an attorney giving that ridiculous, heinous advice, but it’s usually to a homeowner that is at the beginning stage of the process, not the end. That listing Realtor should have recommended that her client visit an attorney when she took the listing. I have had more than one homeowner cancel a short sale listing after given that advice by an attorney, and then, when it’s too late for a Short Sale, they realize that foreclosure is forever and the bank can & WILL pursue them for the deficiency (the difference between what they owe & what the bank eventually gets for the house). Even worse, the bank has up to five years after the foreclosure to file for a default judgment. The bank might not pursue this lady at first, but in five years when her financial situation improves, they can use the judgment to attach new assets (e.g., put a lien on her new house), garnish wages, & generally make life miserable. It won’t even be the bank itself doing all that; the debt & the judgment will be sold to a collection agency for pennies on the dollar.

I sent the buyer’s Realtor a copy of Foreclosure vs Short Sale and Top Ten Florida Foreclosure Myths. If the Short Sale can’t be salvaged, the Seller, the Buyer, the Listing Realtor, the Selling Realtor, and the bank will lose. The only winner will be the attorney. If it was free advice, he can’t be sued for being wrong later. If it was paid advice, he’ll be the only winner in this dilemma.

Jennie Blackburn

Realtor®, CDPE©

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Main (727) 322-2900 Cell (813) 951-0618 Fax (727)499-9584

www.StopFloridaForeclosureNow.com 

www.BlackburnInvestors.com

 

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One Response to “Attorney Throws Homeowner Under Bus”

  1. Unbelievable!
    Bon


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