Wednesday, April 7, 2010

Sad Testimonial

If you aren't familiar with the MN Home Ownership Center's website... we have a form/widget installed on several pages of the site that allows people to send us questions about their housing situation.  A few days ago the Center received a comment through our online form that I thought I'd share with all of you:

Hi, I wish I knew about your organization before I was put in a position where I was given poor advice by my real estate agent on my short sale of my home. I was told by [my agent] to sign a lien release at closing and that would be the same as a satisfaction of debt agreement but afterward my old mortgage comapny informed me that I owe the deficiency balance and now I have to file bankruptcy. do you know of anyway out of this situation so I dont have to file bankruptcy ? I can't afford to pay back the 145,000.00 dollars they want me to pay. Thanks for your time-
We've been able to connect this consumer with a Housing Counselor that may be able to refer the client on for free legal services... but the sad fact is that there is probably nothing that can be done for this client now... short of declaring bankruptcy. 

$145,000 is an expensive mistake to make... and we hope that this homeowner's sad tale will help motivate other homeowners that are struggling with their mortgage to seek the FREE, non-biased advise and support of a non-profit Housing Counselor.  For more information about the statewide network of Housing Counselors in Minnesota, click here.


  1. While I appreciate the sentiment, it's very hard to understand what a counselor could have done differently. Many banks won't negotiate. Even if the borrower had asked for a discharge during the short sale, many banks won't cooperate.

    So, go ahead, call a free counselor. It's free after all. But, I personally doubt they can do much for you.

  2. Anonymous 9:51... Thanks for the comment. While you're right, there probably is very little the counselor could have done to get the debt discharged... at least they could have informed the homeowner about the possible deficiency judgment so that it wouldn't have come as a surprise. There are a FEW banks that will negotiate this as well (tend to be smaller, local banks, though).

    Thanks for the comment!


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