Banks Ready to File Suit Against Short-Sellers

Posted October 6, 2009  –

note: This is part of what we have been talking about. years down the
road these bankers are looking to sue borrowers for deficiencies after
people recover from the disaster the bankers caused. Also set to
explode in a few years are title defects that are incurable resulting
from the securitization of loans and incorrect parties bringing
foreclosure actions and taking title while the Lender sits blithely
unaware that his rights are being twittered away.

Banks Threaten Lawsuits Against Short Sales

Updated: Oct 05, 2009

Banks Threaten Lawsuits Against Short Sales

There’s a new warning out for struggling homeowners who think a
short sale is their way out of a foreclosure. Big name banks like Bank
of America, Citibank, and Wells Fargo are threatening to come after
those who sell their homes through short sales years later once their
credit is restored.

Realtors say banks threatening to do this are causing some fear, but
homeowners have no other options but to turn to short sales over
foreclosure. Remember that bail out money these banks were given?
Realtors say if banks do go after people, that bail out money should be
given back to the government.

Realtor Tammy Truong started in the short sale market two years ago
when she noticed home owners were desperate and didn’t consider
foreclosure as an option. “They’re confused and don’t know what to do.
They want to do the right thing and they don’t want to walk away and
foreclose,” she said.

But short sales are now being threatened by banks. “They are pushing
out the short sale process for as long as possible and looking for new
avenues to try and sue people after a short sale is completed,” said
Realtor Justin Chang.

Chang says at a recent realtors meeting, big name banks were on hand
and made it clear they had no problem with going after homeowners who
short sell years from now as they attempt to improve their credit. “In
a meeting with a lot of bank officials who came out here, they came out
here and said we are able to track for up to six years peoples credit,
so if they do get back on track and are able to purchase again and
employment comes back, that’s when they’ll try to tag them and sue them
for the difference,” he said.

Both Truong and Chang say banks were given millions in bailout money
to help them survive and help the crippling housing market. Going after
owners who complete short sales was not part of the plan. “If they go
back after all these people, I feel they should give back all the
bailout money,” said Truong.

Realtors are turning to Nevada’s Congressional Delegations, hoping
to get them involved in this and stop these banks before anyone is sued
years from now.