BECU is suing borrowers for non-payment on a 2nd loan even though a short sale is in process and the 1st has not yet initiated foreclosure. They are simply treating their loans as unsecured debt (which basically is true when dealing with underwater property) and suing their customers for breach of contract (default on the note). This approach makes a short sale even more difficult, and will make filing for bankruptcy the only real out for many BECU customers.
As for Mutual of Omaha, they are now doing judicial foreclosures in Washington State on their residential mortgages. This means they are not waiving the right to collect the balance owed on the mortgage in a short sale, and they are not giving up the right to collect the full balance owed by using the non-judicial method of foreclosure. So, unless you have the money to pay the balance on the note or a chunk of change to try and negotiate down the amount they want at closing or are willing to make monthly payments on a home you will no longer own, then bankruptcy attorneys in Washington will be seeing more of these types of borrowers in the near future as well. It will be interesting to see what MOO does when it has to sit on some of these properties during Washington's one-year redemption period (applies to principal residences only) while they collect small sums each month from a wage garnishment. Clearly the eggheads that run MOO think one bird in the hand is NOT worth two in the bush and would rather scoop up bird droppings than let a destitute borrower get out of a bad loan in a bad market.
