This is a MAJOR topic for Luxury Short sales because we are talking about a lot of money tied to the possibility of a deficiency. As you read this post please keep in mind that I strongly urge you to talk to a REAL ESTATE Attorney. Each case is so different. If you need one, I have an excellent one I can refer you to.

Here is my take on the subject, although I am not an attorney, I have talked with many of them trying to get a committed answer. If the loan or loans are purchase money (you used the money to by the home) then you are protected in most cases. If you took out a Home Equity Line of credit then this is where it gets really muddy really quick. Some attorneys feel that you could be protected and some feel that you wouldn’t be protected.

Normally on a home equity line of credit it works like this. If it’s not purchase money on your primary residence you may still be liable for the difference of what the bank agrees to take on the short sale and the balance of the loan. This is the case regardless if it is foreclosed on or a short sale.

The beauty of a short sale is that you can, in most cases, get the bank to put in writing that they won’t go after you for the difference.

So in an nutshell, the recourse of a loan is loan specific but if you are trying to sell your primary residence and haven’t taken out a h.e.l.o.c after you purchased it you should be in great shape.

Even if you have please contact me so I can get you in contact with a great attorney because you most likely will be protected and not know it.