Attorney Christopher Charles recently settled $3,734,000.00 in mortgage debt with Bank of America for the sum of $1,620,000.00 via short-sale negotiations. The debt was secured by a luxury home in Scottsdale. The property was secured by a mortgage in first position serviced by Bank of America with a principal balance of $1,509,000.00. Bank of America also had a second mortgage secured against the property with a balance of $2,225,000.00. Mr. Charles successfully persuaded Bank of America that both loans were non‑recourse under Arizona’s anti‑deficiency statute and further argued that the 2nd lien was essentially unsecured because the property’s fair market value had decreased since the origination of the loan.
After considerable negotiation and argument, Bank of America agreed to accept payment in the amount of $1,620,000.00 as full satisfaction of the borrower’s debts. In other words, Bank of America accepted $1.62 million as payment in full for over $3.8 million in debt! The transaction closed escrow last month and Bank of America not only released its liens against the property but provided the borrower with a written settlement agreement confirming that the debt had been fully satisfied and repaid. Better yet, Mr. Charles requested that Bank of America report the short sale to the three credit bureaus as “account paid as agreed” so that the borrower’s credit report will not be negatively impacted by the transaction.
Our short sale team regularly settles debt for less than the amount owed through short-sales and other loan workout strategies. If you or someone you know has questions regarding their distressed property, please contact our office now to schedule a consultation with Attorney Christopher Charles or one of the other members of our short sale team.