Deficiency Clause
I had a 2nd mortgage lender state they were going to require the seller to pay the remaining deficiency to them. Where was I suppose to disclose this that we did not want them to pay the deficiency. It has never come up before now.
"It has never come up before now"
This is nothing new, but now becoming more commonplace. Investor or MI criteria will allow the release of security interest (mortgage) to facilitate a sale, but want to be paid. The remaining debt is either an unsecured loan, secured via alternative property... or judgment and wage garnishment.
The remaining debt is still an asset of the mortgage lender who can sell the debt to supplement its net recovery.
So what do I have to do to "back pedal" and let the seller know that they may still be responsible for this deficiency and what are the chances of this happening, in your opinion?