Bankruptcy Update Part V - The Trouble with Short Sales

I am continuing my remarks from the previous comment. In a case where there is more than one mortgage, just riding out the foreclosure might not be such a good idea - because the second mortgage lender will probably sue after the first mortgage lender finishes the foreclosure. If the homeowner is able to get personal releases from BOTH lenders as part of the short sale, a short sale would obviously be better. If you can't get the personal releases, there's no point of doing a short sale.

If you are not from MN, you should ignore everything I say. These matters vary a great deal from state to state. In MN the most common method of foreclosure is by "advertisement." This involves taking the property without a right to pursue a deficiency. In the current market, first mortgage holders use this commonly; but second mortgage lenders are likely to not bother foreclosing at all, but just sue the former homeowner after the holder of the first mortgage forecloses.

So I understand what you are saying may I ask a question. If you let the bank foreclose, what about a deficiency judgement? Couldn't this be more than the amount that the lender could go after you for on a successful short sale if they did not forgive the shortage? I have noticed that a short sale in many cases brings a higher net than a foreclosure by the time that you add attorney fees and asset management costs.
Or are you saying that if foreclosed on there is no deficiency judgement?