Southwest Florida Title Insurance & Real Estate Blog -

Many homeowners considering a bank short sale are rightly concerned about…

This is the 4th step in our series: “12 Things You Should Know to Survive a Short Sale.”

their liability after successfully selling.

Many clients ask us whether the “bank can come after” them proceeding a bank short sale.

Some clients ask if they will “get a deficiency judgment” or be subject to future liability.

What everyone involved in a bank short sale needs to know before proceeding through it, is that afterward, the homeowner may still be liable for the balanced debt to the lender.

A home buyer who finances the purchase of real estate or a homeowner who refinances their property to tap the equity in their property executes two main documents in exchange for the loan amount from the lender.

Those documents are the Note and Mortgage.

To understand this liability, we’ll first explain the Mortgage and the Note.

The Mortgage is the homeowner’s pledge of their interest in the real property as security for the sums borrowed from the lender.

The Note is the borrower’s personal promise to repay the sums borrowed from the lender at the terms prescribed therein.

In other words, the Note is the definition of payment.

It states on paper

  • How the loan will be repaid,
  • What the interest is
  • How long the payments will continue.

The Mortgage is a separate document that is the security to the Note.

So, if the Note does not get paid, the lender uses the Mortgage to foreclose on the property. The Mortgage can also be called a lien.

Here’s an example of how Winged Foot Title can make things easier for you: This short sale approval letter from Bank of America, which closed 01/22/2010. The short sale approval came within approximately 47 days from the date of short sale package submission.The original loan amount was for 189k and lender accepted 95k with a commission of 5% to real estate agents.

12 Things You Should Know to Survive a Short Sale” is a FREE eBook that is available for immediate download at

If you have any real estate or short sales questions – please don’t hesitate to contact us, or call us at (239) 985-4142. We service all of Southwest Florida including: Fort Myers Estero, Bonita Springs, Naples, Cape Coral, Pine Island, Punta Gorda, and Port Charlotte.


3 Responses

  1. How to get a Mortgage Says:

    Great post, keep up the hard work!

    Posted on May 31st, 2011 at 7:43 am

  2. Jesse Gonzalez Says:

    Your blog is really good. I found it on Bing. I’ll put a link up to it on my site.

    Posted on September 10th, 2011 at 12:58 am

  3. Realtor Says:

    Home owners need to review all options prior to making a decision. You seem to be an authority in the subject and make that decision easy for them. Short sales are the way to go right now. We are Santa Clara Short Sale specialists and are getting many of them closed. Fortunately lenders are finally starting to get better at them.

    Posted on December 26th, 2011 at 7:07 am

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NOT LEGAL ADVICE: This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.

Winged Foot Tite, LLC is not associated with the government, and our [short sale orchestration] service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.