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Short-sale debt collection draws ire

Why are banks getting tax break while also pursuing discharged debt?
Published on Mar 7, 2012

Homebuyers may be attracted to the big bargains that foreclosures and preforeclosures can offer. But distressed properties can involve tricky, lengthy transactions, and there's a lot to think about before jumping in. In fact, some home shoppers have shunned short sales altogether, preferring a more reliable process to a reduction in price. Getting all parties to agree to a short-sale price can be problematic, and lenders have been known to change their minds when more bidders surface. Given the difficulty and uncertainty of negotiating a short-sale transaction, you would think lenders would bend over backward to make things easier for the consumer once the deal is finally done. But it appears some lenders are seeking an additional pound of flesh long after the frustrated, exhausted and often financially drained seller has moved on. Short sales occur when owners, often in distress, sell their homes for less than the amount they owe their lenders. The lender may then write o...

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