Deficiency Judgments are allowed in Connecticut!

Did you know that if you let your home foreclose in CT, the lender can still pursue you for their losses with a deficiency judgement? If a home had a $200,000 mortgage, and it foreclosed and sold for $150,000…the lender can still sue you for their $50,000 loss and then collect. Foreclosures do nothing to wipe away your mortgage debt. Your best bet to avoid a CT deficiency judgment is with a short sale.

A short sale however, gives you the opportunity to negotiate the terms of approval:

Let’s assume that same house on which you owe $200,000 is being sold to a buyer in a short sale for $150,000. In order for the sale to move forward to closing, you must be comfortable with the terms of the approval, which are clearly detailed in a short sale approval letter.

99% OF THE TIME OUR SHORT SALE APPROVALS INCLUDE A FULL DEFICIENCY WAIVER

This means the lender is fully forgiving the balance on the mortgage in order to allow the short sale to happen and avoid having to foreclose on the property.

Once in a while, a lender will request some type of contribution from our sellers in order to get the short sale approved and the deficiency waived. Some sellers are targeted more often than others, but even when a contribution is part of the deal – it is usually a fraction of the amount of the deficiency.

Very rarely (less than 1% of the time) a lender will simply refuse to waive their right to collect a deficiency. In these cases our sellers can decide to move forward with the short sale, or seek an alternative solution. The few times this has happened all sellers have decided to still move forward to avoid a foreclosure.

If you owe more than your home is worth and need to get out, the best way to minimize the damages and avoid future financial liability is almost always a short sale.

Reid Real Estate Group specializes in Connecticut short sales and has been the state’s #1 short sale team since 2010.

Find out if a short sale may be an option for you

Last Updated on October 7, 2017 by Minna Reid

Deficiency Judgment

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About the author

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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  I was about to give up and just turn my back on my home and walk away. However, I found Minna and she was a lifesaver! Other realtors tried to help me but made the situation worse and wasted my time. If you are in the unfortunate place of having to short sale your home, then you know it can be embarrassing and difficult, especially if you don't have real estate experience. Minna knew exactly what to do, and was very professional, knowledgeable, and, kind. Minna was on my side and handled all the challenges we faced with selling a house that at times seemed like it didn't want to be sold! I appreciate Minna and know that you will love her.
  
 
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Minna is highly knowledgeable in regards to selling estate properties. She took the time to explain the process to us and she was very responsive to our needs. Minna was also highly motived to assist us in selling the house quickly. We listened to Minna’s advice in regards to selling the house (during the bidding process) and the house sold for well over what we expected. 
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  Minna has been a fantastic partner in selling our home. She was patient with us in explaining the differences between a short sale and conventional sale and helped us think through the pros and cons of each. During the process of the sale she was strategic and got us the best price for our sale. The process was painless and quick and every step of the way she managed each and every detail flawlessly.
  
 
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A guide to understanding deficiency judgments in CT and how to avoid one.

WILL I OWE MONEY AFTER A SHORT SALE?

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How to avoid a deficiency judgment with a CT short sale