Well, we all know how difficult short sales are. I am representing a buyer and we have finally gotten an approval from the bank. Yay! But, wait, we just got the title report and there is a judgement on the seller for over $150,000! What???
So, here are the details. It was filed in 2005. He purchased the house my buyer is trying to buy in 2007. How did he buy this house? Secondly, it was re-filed in May 2010. The house is worth well below the amount of the judgement. If he can't get the judgement taken off then he will just go to foreclosure.
My question out there to anyone who might have experienced this or have some advice on the subject is:
1)The person who filed the judgement won't get any money from the short sale since there will be no profit, correct?
2) So if he can't short sale the house then he will just foreclose and the person who filed the judgement still won't get any money, correct? It really is punishing the buyer not the seller. The seller has no money and it will just stick with him still.
I see no reason why the person who filed the judgement wouldn't just let that go and keep it with the seller instead of the house. Do any of you think I am off base?
I also read somewhere that if the judgement was filed before the 1st mortgage then they are entitled to the money not the 1st mortgage bank. Any idea if this is correct? If so, then my whole theory is blown because they would get the money. In that case he would just foreclose I suppose.