Settle Promissory Note After Short Sale – Glasser and Glasser Collecting for United Guarantee Residential
My wife and I short sold a house in VA two years ago. A 3rd party "short sale expert" helped us through the process-sort of. The sale negotiation with the bank was held hostage by the Private Mortgage Insurance company (United Guarantee Residential). They agreed to permit the sale in exchange for my wife signing (only one on the mortgage) signing a note for $10000 due in $100 monthly over 100 months.
The short sale expert recommended that she sign the note (since sale wouldn't go through without it) but then not pay the note. He said it was fairly common and chance of them pursuing the debt was very small.
Well, two years later, she recieved a letter from GLasser and Glasser PLC that they had been retained to collect a debt owed to United Guarantee. She requested verification in writing and was supplied with the original note. The "short sale expert" is nowhere to be found...
We/she cannot afford to pay the full amount on the note--in fact, she is a student and between student loans and medical bills, cannot afford much of anything. WE have no credit card debt or anything like that, so besides the short sales, credit is excellent. We would like to avoid her declaring bankruptcy, if possible. In fact, we'd just like this to go away as quickly and cheaply as possible (whether that means settlement, lawsuit, bankruptcy, etc).
I have spoken with GLasser adn Glasser PLC and apparently the United Guarantee is willing to settle for about half of the claimed amount (about $5000). We cannot afford that right now. I counter offered $2000 but am not hopeful that it will be accepted. We first heard from Glasser and Glasser in mid-dec 2012, and we would like to resolve this quickly to minimize any potential harm.
What are our options? Do you have any advice for how to proceed? What would be a reasonable/average settlement amount for this sort of debt/this stage, etc? If we settle, what should we ask for in writing to minimize impact on credit (or even repair it)?
Should we speak to an attorney (any recommendations in Reston, VA)? What amount would be reasonable to settle at this point? Is there any way to tell where they are in their
—John
Settling the promissory notes that have been demanded in order to get a short sale pushed through is becoming pretty standard. Ideally you would have wanted to wrap this up with United Guarantee Financial before a collection attorney got the account, as settlements may not be as good when someone like Glasser and Glasser gets involved.
The promissory note you signed off on has been common in order to push a short sale through. It is a little different that United Guarantee Residential was who dug their heels in over the short sale. They may have had to pay a claim related to your short sale?
Signing off on this now unsecured debt may/may not have been necessary in order to get the deal done. But it’s here now. I am curious about whether your “short sale expert” only got paid if the sale got completed?
Like with any settlement, whether short sale promissory note – credit card debt – other.
Targeting how much to settle the hangover from the short sale for can vary. 20% happens often enough. Especially when these promissory notes get sold off to distressed debt investors for a steep discount. Now that the account is with Glasser & Glasser, 50% may be as good as it gets. But I think you can do better. Negotiating a pay off with a firm like this is helpful when there is a limited income situation. Better still when there are medical concerns. I am not being glib here. The things that make it tough to be you financially right now are the very same things you can leverage when negotiating.
It comes down to money. What you can offer and what they will accept. You mentioned offering 2k as a counter. If your counter offer is not accepted, you may need to be prepared to increase your offer to 3k, or perhaps 3.5k.
I have a few questions for you that you can answer in a comment reply below. Once answered, I will have some additional feedback.
Your wife is back in school. Is she working part time?
What other types of debts are showing on the credit report as being kept current? You mentioned you do not have any credit card debt, but do you have credit cards that report and show use?
Who was the original lender on the home? Who was the servicer of the loan when the short sale went through?
I do have some experienced attorney info I can pass along near Reston VA. You really do not need one if your goal is settlement, at least not yet.
I am not sure what you mean by how far along in their process they are. You sent a validation request and got the promissory note back. You can be sued by Glasser and Glasser. How soon that would happen cannot be known with any certainty, but your current risk exposure is high.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
