When working with short sale approval letters, there is specific language in the letter that must exist in order to have protection from the lender. The borrower’s rights and protection for the state of Arizona will depend on this language in the short sale letter.
PURCHASE MONEY
NON-PURCHASE MONEY LOAN
Lender's Approval Letter provides Express Debt Relief
Borrower is PROTECTED from a claim for the balance of the debt by the agreement of the parties. Be careful of the scope of the release.
Lender's Approval Letter is silent on the issue of debt relief
High probability that the borrower is protected from a subsequent claim for the balance of the debt. Tanque Verde Anesthesiologists v. Proffer Group, 172 Ariz 311 (App. 1992)
Borrower has NO PROTECTION from a claim for the balance of the debt
Lender's Approval Letter expressly DOES NOT provide debt relief
Unknown outcome. Tanque Verde Anesthesiologists v. Proffer Group, 172 Ariz. 311 (App. 1992) may not apply because of phrase "absent evidence of an agreement to the contrary."