What are Real Estate Judgments?
Real Estate Judgments are court orders that a homeowner or borrower may receive in regard to a piece of property that is currently or previously owned. These judgments usually order the person who receives them to pay more money regarding a piece of property.
Many times the person who receives the real estate judgment is not aware that they may owe more money on a real estate issue that they thought was resolved.
Who is affected by Real Estate Judgments?
There are many types of real estate judgments but the ones that usually catch people by surprise have to do with either a home that was Foreclosed and sold at auction or home that was sold through the use of a Short Sale.
In some cases a person may also receive a Real Estate Judgment after being involved in a Deed in Lieu of Foreclosure agreement with their lender.
In most cases people are surprised by Real Estate Judgments because they did not use a skilled and knowledgeable attorney when going through the Foreclosure, Short Sale or Deed In Lieu of Foreclosure process. It is best to have a skilled attorney take the lead with any of these complex real estate situations but you should at least have the paperwork reviewed by an experienced attorney before going through with these transactions.
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How does the Real Estate Judgement process work?
The two main situations that cause Real Estate Judgments are when a home is Foreclosed and when a Short Sale goes through. Each of these is discussed below:
Real Estate Judgments – Foreclosure:
The people that get into trouble after a Foreclosure are those that had taken out a home equity line of credit or some other kind of refinance after the original date of the purchase. In California, the holder of a second mortgage (or third, fourth, etc) can still come after a borrower for money, even if a Foreclosure and sale at auction has already occurred.
Real estate Judgments – Short Sale:
Real Estate Judgments resulting from a Short Sale can happen in the same way that they occur after a Foreclosure. The holder of a Second, Third or Fourth mortgage on the property can legally come back for compensation from the original borrower. If the subsequent lenders (2nd, 3rd, etc.) are not included in the Short Sale agreement in a legally binding way, a person may be opening themselves up to a future Real Estate Judgment.
The difference between the amount owed on the loan and the home sale amount during a Short Sale is sometimes called a deficiency. The lender may or may not waive this deficiency. If the deficiency is waived by lender, the seller in the Short Sale transaction does not have to pay the deficiency in the future. If the lender fails to waive the deficiency in a legally binding way, the seller could have to pay this back in the future.
Check out our services or contact us today for a free consultation to make sure that you are protected from future Real Estate Judgments.