Legal Question in Real Estate Law in Georgia

I�ve got an approval letter for a short sale. In the letter the bank wrote that it will notify the credit bureaus that the loan �was paid in full with less than full balance�. It also said that �Compliance with the Demand Statement coupled with release of the mortgage shall waive the bank�s right to seek a deficiency under the loan documents or any of its other rights there under, and the

obligations evidenced by the note�. Does that mean that I will be released from the liability? (I�m located in Georgia if that makes any difference).


Asked on 9/08/12, 7:20 pm

1 Answer from Attorneys
Glen Ashman Ashman Law Office also dba Glen Ashman Attorney

Possibly. Your post tells me one very frightening thing. You appear to be selling a home without a lawyer (the closing attorney is NOT your lawyer). Do NOT sign the contract to sell the home, any short sale papers or anything else, without a lawyer. (You also want to ask the lawyer if a short sale is your best option). Remember that if you mess anything up the house sale could fall through, or the bank might not release you, or the prospective buyers could sue you. So get it right.

By the way, the bank's ding to your credit score will stay with you for seven years and lower your credit score for that entire time.

Another thing to be careful about: When the short sale happens the bank will issue you a 1099-C showing as taxable income the amount forgiven on the loan. If you meet certain tests AND complete the sale by Dec. 31, 2012 you may get to avoid the tax hit. However if you do NOT meet those tests, or the sale gets delayed past that date, you may get a very large income tax hit. Discuss this now with your CPA.

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Answered on 9/08/12, 7:31 pm


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