I received this article from a local Title Rep. I found it interesting because even Lawyers I have sent my clients to have told them and myself that if the loans were purchase money they were protected in a short sale. Why do we alwys get differing opinions from those who are supposed to be experts? This is very frustrating!

This was the topic of our roundtable discussion yesterday with Tom Farley. In case any of you are not aware, Tom Farley is the CEO of Arizona Association of Realtors and your lobbyist for the last 13 years. He spoke to the group about Anti Deficiency and the Short Sale, as well as providing updates on issues affecting Realtors that are up coming in the House and Senate as well as your local government. He requested that you go to www.aaronline.com to provide your voice and your support to those issues which include a proposed increase to property tax that is being discussed. He is working very hard to support the issues that maintain the best environment for Real Estate as an industry and homeownership in Arizona. He needs your support added to his work to create the greatest impact.

That is only one reason for my correspondence to you today. One issue that Tom made perfectly clear, and we all felt was important to get out to those of you who may not have attended, is this. In Arizona, there is anti-deficiency protection for a large number of property owners who go thru foreclosure, however, there is no statute that provides anti-deficiency protection to any property owner in the case of a short sale. Our anti-deficiency laws only cover foreclosure. Tom Farley stressed that it is important that we not make incorrect representations to the sellers in this regard. The deficiency protection they may be able to receive is only found in the terms of the short sale approval letter provided by the lender. If the lender does not fully release them from the lien, but only releases the property to close and transfer, there is not any guarantee that the lender will not pursue the seller for the remainder of the unpaid balance on the note. One popular myth that was dispelled at yesterdays meeting is that there was protection if it was purchase money. This is not true. While some lenders are providing the release in these cases they are not obligated to do so. Tom stressed the importance of legal counsel for sellers facing short sale with regards to this issue once again. Please talk to your broker and make sure you are protecting your self and your customers in this very unique market.