worked out an arrangement with the bank to pay a lower than owed amount to the bank in exchange for the bank releasing its lien on the house. In a short sale, the bank would agree to the reduced payoff amount and the house would be sold to a new buyer.
Yesterday, my current residence was sold in a short sale. This was unbeknownst to me, as the house is in my father’s name. My dad had taken out a loan of $75,000 against the house to put a down payment on a home for my younger sister and her new husband. Since this loan was taken out in my father’s name, and he is deceased, the house is in my sister’s name. Today, she is supposed to sign documents, as the house has been bought by someone in a short sale.
I am not a lawyer, but I want to know if I have any rights in this situation since I am not on the loan or the deed. It is possible the house could be saved until I can get on the deed, however, I suggest speaking to a lawyer as soon as possible. If my sister is signing documents, it seems like she is offering the lender a deed in lieu of foreclosure. There may still be time to save the house, provided I can afford the outstanding loan amount, ideally in cash. The issue here is that the house may not be worth it, which is why my sister did not try to sell it on the open market. It is likely there is more going on between my sister and the lender.
The difference between a short sale and a sheriff’s sale is that in a short sale, my sister has worked out an arrangement with the bank to pay a lower amount than what is owed. The bank would agree to the reduced payoff amount and the house would be sold to a new buyer.
If you find yourself in a situation like mine, where you are not on the loan or the deed and the house has been sold in a short sale, then it is possible to save the house. The key is to speak to a lawyer as soon as possible and consider whether you can afford the outstanding loan amount. The loan amount might not be worth it in the end, so you may want to look into other solutions.