Bank of America No Longer Pursuing Deficiency Lawsuits in Nevada
Good news for those involved with the short sale process in Nevada! Bank of America has changed the templated wording of their standard short sale approval letter.
Bank of America has finally deleted the verbiage referring to the bank's right to 'pursue a defiency judgement' against a homeowner.
A deficiency judgment is when a bank sues the homeowner for the difference of the amount between the discounted amount the home sold for and the actual note amount.
For example: A house in Las Vegas, NV, has a mortgage of $200,000 but was sold via short sale for $150,000.
In the case of a deficiency lawsuit, the bank would be able to sue the homeowner to collect the difference of between the mortgage value and discounted price, which would be ($200,000 - $150,000) $50,000.
Talk about rubbing salt on a wound.
According to Bill Myers, Nevada's top short sale Realtor and owner of The Myers Team with Century 21 MoneyWorld, "The reason to do a short sale is to minimize damage to your (the homeowners') credit and avoid being sued by your bank.
" Given the risk of these lawsuits by the banks, however, many homeowners have been reluctant to go ahead with this strategy for the fear of these judgements.
Thusly, many of these home owners have had to suffer the credit damages associated with foreclosures.
While long overdue, it's good that Bank of America has finally decided to do the right thing and join the other major banks in eliminating the deficiency lawsuit verbiage from its approval letters.
Given the long list of distressed assets banks are holding, it really is about time that these larger banks start applying common sense logic to those trying to do the best they can in these tough situations.
Bank of America has finally deleted the verbiage referring to the bank's right to 'pursue a defiency judgement' against a homeowner.
A deficiency judgment is when a bank sues the homeowner for the difference of the amount between the discounted amount the home sold for and the actual note amount.
For example: A house in Las Vegas, NV, has a mortgage of $200,000 but was sold via short sale for $150,000.
In the case of a deficiency lawsuit, the bank would be able to sue the homeowner to collect the difference of between the mortgage value and discounted price, which would be ($200,000 - $150,000) $50,000.
Talk about rubbing salt on a wound.
According to Bill Myers, Nevada's top short sale Realtor and owner of The Myers Team with Century 21 MoneyWorld, "The reason to do a short sale is to minimize damage to your (the homeowners') credit and avoid being sued by your bank.
" Given the risk of these lawsuits by the banks, however, many homeowners have been reluctant to go ahead with this strategy for the fear of these judgements.
Thusly, many of these home owners have had to suffer the credit damages associated with foreclosures.
While long overdue, it's good that Bank of America has finally decided to do the right thing and join the other major banks in eliminating the deficiency lawsuit verbiage from its approval letters.
Given the long list of distressed assets banks are holding, it really is about time that these larger banks start applying common sense logic to those trying to do the best they can in these tough situations.