I am really concerned about my friend who lost her house to foreclosure about three months ago.  The relief she feels about the drama finally being over has evidenced itself physically (she’s lost weight and looks fantastic) and even her children are smiling again.  The whole family is flourishing – “When Momma’s happy, everyone’s happy!”

But I’m worried for her.  I recently wrote about lenders coming back to haunt former clients after years have passed.  They’ve come back for the money that was unpaid – sometimes on foreclosures, but mostly on short-sales.

Here’s the skinny,

If you live in one of the states named above and unless you have a letter from the lender specifically stating that you are fully released from any deficiency from the short-sale, you may be in for an ugly surprise sometime in your future.  Lenders typically have up to six years to come back after the seller and collect the deficiency – the amount that was forgiven or lost in the sale of the home.

Some states are non-recourse states meaning that when the short sale is over, it’s all over.  But if you live in one of 38 states (or DC or Puerto Rico), you’re out of luck.  Where are you safe? According to HELOC Basic, here’s the list:

• Alaska
• Arizona
• California
• Connecticut
• Florida
• Idaho
• Minnesota
• North Carolina
• North Dakota
• Texas
• Utah
• Washington

Good luck!