While our market has been tough, we haven’t experienced the severe drops seen in your market. I’ve never heard about a Deed of Trust turning into an unsecured credit card. I think it depends on the loan agreement a borrower signs when they receive the loan. In most cases, since the loans are secured by the property, if it goes into foreclosure, all lenders may lose their part of the outstanding debt. That certainly does not prohibit those lenders from seeking collection.

When a seller and their Realtor are negotiating a short sale, they should remember to request the same consideration and conditions on any additional loan on the property. Once again, it is important to have professional counsel.

I negotiate short sales here in the vegas area as well as the rest of the United States, and for this market here in vegas to rebound would take a very long time. Like till at least 2013. I was watching go scout homes and 60% of the homes on the show were REO. Would you pay for a mortgage that the home was no longer worth what you had paid for it? Perhaps you should take a look at the article on ABC new from Tuesday where Countrywide the countries leading lender says that over 28% of their loans are in default. No longer C and D paper but their Prime borrowers as well. The articles goes further to say that we have not seen this kind of depreceation of property since the great depression. The articles goes even further to say they do not expect a rebound in the market till at least 2009. Also you should think about the fact that which ever Deed of Trust forecloses on the borrower the other turns into an unsecured credit card…… Just some food for thought.