Legal issues with Short Sales and Foreclosures
Posted by Rich Fine on Friday, April 16th, 2010 at 12:51pm.I'm typing as I sit in a class at the Park City Board of Realtors 4-16-10. Utah is shown on a few websites as being a non-recourse State for deficiencies in foreclosure. The fact is, they have 90 days to file against you for the deficiency.
Rich Fine
FineProperty.com and RichFine.com
435.640.2124
Rich@FineProperty.com
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Here is some interesting research that I have done in regards to foreclosures or should I say short sales. I suspect most realtors are not communicating this to their sellers since real esate agents are not attorneys and it becomes a fine line: You are correct that under the foreclosure laws of Utah allows a period of 90 days for the dificiency judgement to be filed. What about the case of a "Short Sale". A short sale is NOT a foreclosure and therefore the foreclosure laws do not apply. I made several calls and from what I can gather a short sale would fall under the "regular" statues of limitation which in the state of Utah is either 4 or 7 years. What many sellers/owners of short sales do not realize is that at the time of closing they will sign a document from their lender that states any deficiency under the law of the state may apply. In other words, if an owner sold his home in a short sale and in 3 years from now they have re-established their credit and assets could the previous lender then decide to try and collect the deficency? It may be years before we know the answer to that one, but I think legally it a possibility!
Posted on Tuesday, June 15th, 2010 at 8:35 PM.