Waiver of Deficiency in Chicago
What is a waiver of deficiency?
When you carry out a short sale on a property with an underwater mortgage, the amount you receive from the buyer will be less than the amount you owe to the lender. For example, if you owe $300,000 on your home mortgage but can only sell it for $250,000, you will still obviously owe the bank $50,000. Therefore, why would you want to do a short sale, if it means that you will lose the house, make no profit from selling the property and end up still owing money to the bank?
The fact is that in most short sales, the homeowner walks away from the situation owing the lender nothing at all. This is thanks to the fact that the
Chicago foreclosure defense attorney representing the seller will usually be able to obtain a waiver of deficiency from the bank. Such a waiver is essentially the lender's agreement to forego any right to pursue the borrower for payment on the balance of the loan, so that you are no longer held liable to pay.
Helping You Avoid a Deficiency Judgment in Cook County
The waiver of deficiency is one of the best reasons to pursue a short sale rather than allowing the lender to carry forward with a foreclosure on your home mortgage. If the property is upside-down - worth less on the market than the amount you still owe on the loan - the bank will most likely not recover sufficient proceeds by selling the property at auction to satisfy the loan balance. Under state law, the lender has the right to pursue you for a deficiency judgment to make you pay the remainder, and they may have recourse such as wage garnishments and liens on your personal property to enforce payment. The goal of
short sale negotiations is not only to prevent a foreclosure but also to help the borrower to avoid the liability of being held responsible to pay on the remainder of the loan.
Looking for an attorney for foreclosure defense in Chicago? Contact us now at Whiteman Borden, LLC to learn more about how a Cook County waiver of deficiency lawyer can help you pursue a waiver of deficiency and to get started on your own short sale process.