How do I know if the lender is forgiving the remaining debt?








Each lender has a different type of short sale approval letter.
Some are one page long, and others may be 10 pages long.

Below are phrases that indicate the remaining debt is being forgiven:

       “Under this Bank of America Cooperative Short Sale Agreement, Bank of America and/or its investors and/or insurers will accept less than the payoff balance on the above referenced property and release you from any further financial responsibility for the outstanding first lien mortgage.”

       “JPMorgan Chase Bank, N.A. agrees to release its security interests to the above collateral AND forgive any deficiency balances upon receipt of $112,168.12 in certified U.S. funds.”

       “The owner of your mortgage note, the mortgage insurer (if your loan is covered by mortgage insurance), waive their right to pursue collection of any deficiency following the completion of your short sale and your debt is considered valid.”

       “PNC Bank, N.A. will not pursue collection of the remaining deficiency balance (‘Debt Forgiveness’) after the closing, which after receipt of the Proceeds of Sale will be approximately $8,931.29.”

       “Upon receipt of certified funds, the debt will be considered to be fully satisfied for less than the amount due and no remaining deficiency balance will be owed.”

Below are phrases that indicate the remaining debt is not being forgiven:

       “Upon receipt of the funds, we also agree to release our interest in the subject property by satisfaction of the lien of record.  Acceptance of this offer does not relieve the borrowers of their financial obligations of the loan deficiency and any derogatory credit reporting that may arise from it.”

       “We agree to release the lien but not the underlying note.”

       “The Bank is willing to accommodate the Borrower in releasing the Mortgage, provided that the Borrower affirms its obligation to pay the outstanding balance due, including principal, interest and any other charges, under the Note, after applying the ‘Required Proceeds’, as defined herein, to the obligations under the Note, and further provided that the Borrower otherwise fully abides by all of the terms and conditions of this Agreement.  The Borrower acknowledges and affirms that following application of the Required Proceeds, the Borrower shall remain fully obligated to pay the Deficiency that shall remain due and owing under the Note, and that the Note and the Borrower’s obligations thereunder shall remain in full force and effect notwithstanding the release of the Mortgage by the Bank.”















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