Remember that the statute of limitations in Virginia gives the foreclosing lender five years after default to pursue the deficiency. With a foreclosure, the deficiency is not waived, so the borrower has to worry about possible collection activity. On the other hand, with a short sale, the Borrower has a reasonable chance of negotiating the waiver of the deficiency. Tucker's Tip cannot stress enough the importance of negotiating a waiver of deficiency when negotiating a short sale.
Our success rate is over 80% for having deficiencies waived. Of the deficiencies not waived, there is very little collection activity. For the few instances the lender attempts to pursue the deficiency, they will settle for pennies on the dollar. As a result, short sales are always preferable to a foreclosure, especially if the borrower is simply walking away from the home and pursuing a strategic foreclosure.
Although the pursuit of deficiencies is not certain, one thing is true: struggling homeowners need relief!
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions. Thank you for allowing us to send you this email.
William D. Tucker, III
Charlottesville, VA 434-973-7474 | Lake Monticello (Palmyra, VA) 434-589-3636