Can a lender try to recover the deficiency?
Yes, we have seen this more with Equity lines and Lenders who actually still own the loan, for example Wells Fargo Equity. This means that the Servicer does not intend to forgive the debt. Expect this to be treated as unsecured debt. The Servicer will most likely have a Recovery Department call the Borrower to settle the amount owed (much like settling a credit card debt through negotiation). We recommend attempting to settle this amount up front before signing off on a short sale and not waiting until later. Also this amount may be eliminated later through bankruptcy – look for a tab Deficiencies for further explanation about this.
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