recourse and non-recourse

[Anonymous]

I have a 1st and a 2nd mortgage.  I have gone over both of the notes and deed of trust and DO NOT see the verbiage anywhere if they are recourse or non-recourse loans.

Reason I need to know is my home is for sale and will be a Short Sale.  I have read so much conflicting info that I am overwhelmed.  I'm concerned that I will be hit with paying the difference. 

Any advice??

Thanks

[ShanetheMortgageMan]

You can actually call up your lender and explain your situation, and ask what they would do... it might take a couple phone calls, or even waiting on hold for 15-30 minutes, but that would be the appropriate route to take.

What state do you live in?  Was the 1st & 2nd mortgage used to purchase the property?

[Anonymous]

Thanks Shane,

I live in VA, the loan is an interest only ARM.  It was used to purchase new construction in 1/2007.  1st loan is 434K , 2nd is 81K, paid 546K for the home  The home is on the market now since 10/2007, home is now vacate, comparables is the area are 450K and well under.  Builder  ( Ryan Homes ) is building new starting at 399K.  This is an Estate Community that is now totally upside down in value in just 2 years since it was built.  I attempted to refinance and could not get a deal.  Last resort is to walk away.  Short Sale is my only option right now.  I've read so many conflicting stories and opinion that all I can do now is pray for a decent outcome.  I have submitted all the shortsale info to both lenders, now I just need a buyer.

[dangphuocloc72]

my offer 185K .

[Anonymous]

I would avoid asking the lender if they will come after you for the difference. No use tugging on Superman's cape. Ask a RE lawyer in your own state whether they can. Also ask if he knows whether that lender customarily comes after people on deficiency or not.You also want to know if they are likely to file a 1099 on you for the shortage. You don't want the IRS interpreting it as income through debt forgiveness and that could happen.

[ShanetheMortgageMan]

The lender is going to do whatever they want to do, regardless if you contact them or not.  They aren't going to lie to you if you ask, further, they might have some solutions to offer as well.

I found this info on foreclosure process in Virginia, second one talks about deficiency judgments:

http://www.foreclosureassistance.com/states/virginia.html

http://www.foreclosure.com/statelaw_VA.html