Short-Selling Homeowners: Beware Of Lurking Bill Collectors, 'Zombie Debt' Buyers Looking To Squeeze You For Unpaid Mortgage Loan Deficiency Balances

In Phoenix, Arizona, USA Today reports:

• Some former homeowners who went through short sales to avoid foreclosure are finding they are still in debt to their lenders. Because the short-sale concept, which allows people to sell their homes for less than they owe, is designed specifically to help homeowners avoid having to pay their lenders more money, some sellers have been careful to negotiate their deals so the lender, by contract, can't later seek payment. Those who haven't done so are at risk.

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• Tricia Goldblatt sold her Phoenix home through a short sale last year after losing her job as an executive assistant at an engineering firm. A few months ago, she started receiving calls from a collection agency. "They are telling me I owe $10,000. I did a short sale to get out from under my mortgage," she said. "I don't have that money. I had to move in with my mom."

• Goldblatt said she thought the documents for her short sale specifically stated her liability for both her first and second mortgage would be terminated. But the collection agency said it bought the note on her home-equity loan from her lender and wants to be paid.

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• [M]any sellers think that once the short sale is completed, they are free of liability. That's when the unwelcome calls can begin. There usually is a lag between a short sale and when a lender will try to collect on unpaid debt or sell it to a collection agency. It was almost a year after Goldblatt's short sale when she was contacted by the collection agency.

For more, see Some homeowners still owe after short sale.