An increasing number of lenders are going after borrowers who sell their homes for less than they owe – known as a short sale – in order to recover more of the difference between the amount owed and the sale price.
Lenders say the factors that they consider when they decide to seek more money are:
* How large was the unpaid debt?
* Was the property an investment or a personal residence?
* How much money does the borrower make and what other assets does he have?
* What is the policy of the mortgage insurer or the holder of the second lien?
A PMI Group Inc. spokesman says the mortgage insurer “primarily target[s] borrowers who are not experiencing hardship – but those who simply elected to walk away from the property due to its decline in value.”
Source: The Wall Street Journal