After a successful short sale closing, can a mortgage company sue you for deficiency or delinquency after 6 months?
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After a successful short sale closing, can a mortgage company sue you for deficiency or delinquency after 6 months?
Asked on October 9, 2012 under Real Estate Law, South Carolina
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Unless part of the short sale contained an agreement for your lender to waive its rights to a deficiency, it is perfectly permissable for it to try and collect. Under most state laws, such collections can be initiated from 3-10 years after the debt is incurred. If you are sued, the lender can obtain a "deficiency judgement", which will entitle them to garnish wages, seize bank accounts, etc. Therefore, you need to deal with this ASAP.
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