So you were one of the numerous Property Owners/Sellers who had to go through a foreclosure, initiate a short sale or perform a Deed In Lieu? Okay..say whichever process is signed, sealed and delivered and you are onto the next phase of your life..trying to put the pieces back together and get on even footing so to speak. Good for you.
If you only “thought” you had negotiated properly..but did not get anything in writing..did not obtain from the bank that owned your note that they RELEASED you from the deficiency debt..you may be in trouble. A lot of Buyers assumed that the deficiency amount was part of the negotiation proceedings and were shocked to find out that they were on the hook for those deficiency amounts and, as it what you had already gone through in losing your home wasn’t bad enough..now you may face a potentially large bill and perhaps have to do a bankruptcy. Good news is that California is a “Non-Recourse” state and does not allow deficiency judgements..but read the fine print…you may still owe money. If you refinanced your ORIGINAL note..you may be liable for the difference in those amounts. Also be aware that they are looking at your financial records to see if you have any assets that could offset this deficiency.
They can come after you years after you thought you had put it all behind you. For those currently facing a Short Sale or a Foreclosure proceeding or considering doing a Deed In Lieu..PLEASE PLEASE..make sure you get something binding in writing that absolves you from them coming after you down the road. It is so important..I would pay the money to have an attorney look any documents/agreements over that you have made with your lender. Do not rely on your Realtor to advise you on these life altering decisions..please consult an attorney and tax professional. Tax professionals will be able to advise you on whether or not you will have to pay taxes on amounts you received but did not pay back in whichever process you went through.
Good luck out there!!