St. Petersburg Short Sales: Are homeowners able to sue their lenders after a foreclosure?

24Nov10

St. Petersburg FL – I am following up on a question from Arman. His loan was owned by Fannie Mae and the company handling the loan for Fannie Mae was rejecting an excellent Short Sale offer for no reason.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

Here is a quick recap of possible steps that Arman could take:

Step #1: Call his lender and demand a written letter explaining why they are declining the Short Sale offer.

Step #2: Write down what his projected personal losses are going to be if the property is foreclosed upon instead of sold as a Short Sale.

Step #3: Call his lender and tell them that, if the Short Sale offer is rejected and the house is foreclosed, he has documentation ready to present in a legal action to recover his losses, specifically, those he detailed in Step #2.

Here is the basis for Arman’s argument:

First, the company handling his loan is not his lender.  That company (in this case, a company owned by IBM) was hired by Fannie Mae to service the loan by collecting payments and to act in Fannie Mae’s best interest.  By not accepting the higher Short Sale offer, they were not doing everything they could to help Fannie Mae net the most money from the property sale.

As the mortgage owner, Fannie Mae had a duty to minimize its losses and was negligent in allowing their servicing company to operate against the best interests of Fannie Mae, resulting in negligence toward the homeowner.

As a result of their negligence, Arman will have a foreclosure on his record.  We all know that a foreclosure will be much more damaging to his credit history, but he will have other damages from a foreclosure.  In a Short Sale, the lien is released and the debt can be fully forgiven.  In a foreclosure, the debt is not forgiven and Arman would owe the difference between the unpaid mortgage and the sale price of the home.  Since foreclosed properties sell for 20% less than comparable Short Sales, he would owe and be pursued for a much higher amount.

Arman believes that, when he gets in front of a jury to show how this company’s negligence caused Fannie Mae to lose $15,000 on the sale of the home and that it hurt him financially as well, the jury will award damages in a heartbeat.

In tomorrow’s blog post I will detail the specific damages Arman might ask to be compensated for by the lender.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jennie@blackburninvestors.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 727-599-5418.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our St. Petersburg Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Jennie Blackburn.

Jennie is a Real Estate Agent at Blackburn Investors Realty.

Phone: 727-599-5418. jennie@blackburninvestors.com.

Rebuilding lives…one home at a time.

Jennie Blackburn specializes in loan modification assistance and short sales in St. Petersburg Florida. St. Petersburg Loan Modification Help, St. Petersburg Short Sales. St. Petersburg Short Sale Realtor. Short Sale Realtor. St. Petersburg FL Short Sales. St. Petersburg Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Jennie Blackburn’s personal views and do not reflect the views of Blackburn Investors Realty. This information on St. Petersburg Short Sales: Are homeowners able to sue their lender for damages after a foreclosure is provided as a courtesy to our viewers to help them make informed decisions.
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