Question: I am thinking about conducting a short sale on a condo I have in Palos Verdes. I have a home in Orange County that has some amount of equity, and I’m doing alright in my 401k. Doing a short sale with my mortgage lender will not risk my other assets, will it? If I am unable to do a short sale with the condo and end up having to lose it in foreclosure, what will happen? And will the tax liability be the same for either outcome?

Answer: If you bought the Palos Verdes condominium with a mortgage loan, a foreclosure will terminate the bank’s rights to any of your other assets. If the mortgage lender agrees to let you do a short sale, you should also end up with no liability to the lender, unless part of the agreement was reimbursing the lender the discrepancy of your loan and the sale.

Basically, you shouldn’t have any liability for the short-sale-difference unless that was originally part of the agreement.  Then of course you’ll be responsible to those payments in  whatever form you agreed to make them.

As for the tax issues, keep in mind that the IRS doesn’t recognize any tax liability whatsoever for forgiving non-recourse debt.

An important thing to keep in mind when considering a short sale to avoid foreclosure- your lender is not technically obligated to sell your house in such a manner. For them, it is a pure cost-benefits calculation. When they allow a real estate short sale, they have to swallow the discrepancy between the amount you owe on your mortgage and the money your house brings in when it sells. They don’t like doing this unless the alternative is even less profitable.

You may even have a potential buyer who has put down all the paperwork to make an offer, and they still won’t cave. On the plus side, this can go two ways- the bank may say you have to go into forclosure, but they may also try to convince you to stay in your house and refinance your mortgage.

You may even be able to settle it with a loan modification.

If that doesn’t work, though, and your bank is willing, a short sale may be completed. In order to comfort potential buyers, you may want to think about moving out of your house while going through the shortsale process- this will make it seem less likely that you may decide to simply refinance. And be sure to get official approval from your bank. “Bank Approved Short Sale” is much more likely to get takers than one that doesn’t yet have expresss permission. a

The National Association of Realtors has introduced a new certification system designed to make sure real estate agents get more training in foreclosure sales and short sales.  Called “Short Sales & Foreclosure Resource”, the program is being offered because recent member surveys have shown that these types of properties make up more than one-third of all home sales nation-wide. A real estate agent can’t afford not to be comfortable with the process.

Many real estate agents have had to do with on-the-fly, on-the-job training through experience with these types of sales.  They all require more paperwork than a regular home sale and more patience, but they’re not impossible. Private companies often offer training programs and certification labels to show clients that an agent has ‘official’ skills in the ‘distressed’ property field.

Sellers forced into a foreclosure and/or a short sale are often panicky and more difficult to deal with, but they need to keep in mind that they can stary in their homes for quite some time. Receiving a notice from the bank does not necessarily mean you have to move out right away. The bank doesn’t own a home until it has been officially foreclosed, a long and difficult process.

In this window, a skilled real estate agent can intervene and get the ball rolling on a shortsale instead. The seller must prove financial hardship, but it is not impossible.

The key factor in selling a house, especially one in foreclosure or a shortsale house, is to choose good pricing. You need to put the house up for a price that is competitive with other for-sale homes in the area and in similar areas. Asking for too much will leave you sitting on a house with no bids, wondering what happened. Asking for too little will raise the ire of your lender/bank.
It’s difficult, but lenders want their real estate short sale houses to go for as close to their appraised value as possible- in this current recession, that means a lot of legwork. And if a buyer makes an offer thati s crealy far too ow, it may be better not to report it to the lender at all. Clearly, the bank will say no, wasting ime and effort that could be spent on trying to get the house sold for more.

If a realistic offer is made, your real estate agent submits a big packet of paperwork to the lender/lenders for them to approve the deal. This is a crucial step that requires high precision- even one piece of paper out of place in that packet can result in a no-deal and big waste of time. Lenders have limited time to work through these packets with you- if there’s something wrong, they’re likely to just put your back at the bottom of the pile, so to speak.

According to official reports, home prices have continued to decline during the third quarter of this year. But many real estate agents in the Southern California area maintain that they have seen many signs of stabilization.

On Tuesday, the National Association of Realtors reported that home prices in major metropolitan areas declined almost fourteen percent when compared to the same time last year. However, prices were up in the first part of the year, which suggests that the oscillations may even out.

An agent with J.T. Kirkland predicts that mortgage rates and the federal homebuyer’s tax credit will help to pull in new buyers into the market, keeping prices at least stable, if not rising, into the spring.
“It’s different town to town, city to city,” he says. “Areas with good schools are seeing increases, for example, and demand is rising again.”

He confirms that, on paper, prices at the high and low ends of range have indeed dropped, but that the middle prices have remained fairly stable, which means that most buyers and sellers will have more luck than they suspect. However, the markets flooded with foreclosed and shortsale properties, which create a downward pressure on prices. Real estate short sales have been very helpful in some areas, but when they become to common they tend to exacerbate the problems.

But the tax credit is doing its job- incentivizing first-time buyers to get into the market and snap up those foreclosures and short sale homes. And though overall prices are down, the actual number of sales is increasing thanks to the credit. Sales of single-family homes and condominiums actually rose more than eight percent this quarter, though they haven’t reached anywhere near the peaks of 2004-2005.

The main problem, say experts, is psychological. People feel frightened, insecure in the their jobs and wary of getting trapped into a payment deal they can’t handle. The key to overcoming these doubts is open communication with lending institutions, buying affordable homes that fit one’s income, and ignoring the melodramatic reporting on the housing market on TV. Television news exaggerates in order to get more viewers- obtaining news from free outlets can often be more reliable. The only thing to fear is fear itself.

Another thing for potential buyers to keep in mind is that they will never get an opportunity like this gain- home prices will soon begin rising again. It’s smart to get into the market while everything is cheap.

You also have to include a hardship letter, in this you really wanted detail the hardships that you have faith and are facing and why the bank should agree to a short sale versus taking a gamble on whether or not you’ll be able to make good on this note sometime down the line. Be sure to include all mitigating factors such as lost your job you got sick were in the hospital anything that may affect your abilities or may have affected your abilities to earn a living that would help pay off his mortgage.

Statement of income and assets, here you want to be truthful and straightforward detailing to the lender will of your accounts savings checking in any other assets you may have that they will look at before agreeing to a short sale. Proof of income or the lack thereof, again it’s best to be truthful and straightforward they will be able to obtain filings that your employers may have made and it’s best to have that information up front rather than to find out once you’re deep in the process that the process has been declined because they discovered something that you did not disclose.

Current market comparisons, it’s best to include a competitive market analysis markets decline properties decline all calls in home values drop this can be part of the reason why you can’t simply sell your home and pay off the lender you’ll need to substantiate this claim via a comparative market analysis he qualified real estate agent can compare your comparative market analysis which basically shows prices for similar homes in your area, this will include homes that are active on the market, pending sales, and homes that have been sold in the last six months.

Home forclosure shortsale

If everything checks out the lender theoretically should approve your short sale as part of the agreement you should ask your lender not to report this transaction negatively on your credit, while this is a standard request the lending institution is under no obligation to comply unless they explicitly agree to.

Access loss mitigation has performed numerous home short sales, we have in effect reversed the foreclosure process and pre-foreclosed on the lending institutions on behalf of the homeowners by utilizing the short sales process. We would be more than happy to provide a absolutely free no obligation consultation.

The Lowdown on short sales

Part 1

There are many ways to lose a home such as bankruptcy foreclosure proceedings where you would watch your home be auctioned off and the sheriffs come and physically remove you and your belongings from your home all of which are extremely unpleasant to say the least. Not to mention destroying your own credit having to deal with loss of dignity embarrassment and the fact that you are now homeless.

Over the last couple of years short sales have become extremely common. What is a short, and should I consider it. A short sale at its essence is the lender is agreeing to accept less than the current amount that you owe. Short sales are essentially a reduced pay off by either you or a third party, there are times that the lender will not accept a short sale if it makes sense for them to actually foreclose on you. What about if the situation arises where you don’t have the money to pay off the reduced amount, there are situations where a third-party may put up the money on your behalf in various arrangements, whatever you do make sure that you consult with a qualified professional before making any commitments, always obtain legal advice from a competent real estate attorney, contact your accountant to discuss short sale tax ramifications,

or contact a shortsales specialist at accesslossmitigation.com.

Home Short Sale

The first thing you can do when researching a short sale would be to call the lender (more…)

If you have recently lost possession of your house to a painful foreclosure or short sale, there’s a chance you may be able to afford a new home within the next two years if you get on it right away and stay diligent and dedicated to fixing your credit rating.

Whether you were able to get your lender to agree to a shortsale, or you had to resort to the worse blow of foreclosure, if you get started rebuilding right away, you can take steps to re-polish your tarnished credit report. You should definitely go over the details of your credit report- you need to know exactly where you are right now. You can get a free report through many venues, and you should double-check with your own records for accuracy. And if you find any egregious (or even small) problems, you should bring it up right away.

If you have other old debts, you should pay them off as quickly as humanly possible. Forgo buying anything that’s not a necessity and pay off your credit card or car, because those little things can help.

Watch out for scammers who purport they’ll help you repair your credit Don’t pay anyone to do anything illegal, and don’t pay someone before you’re completely certain what service they’ll be providing you.

Double-check the status of the shortsale you did. Make sure that your account shows the zero you deserve for allowing your mortgage lender to accept a payoff for less than what you owed. You went through the struggle of a short sale, and if they don’t write it off as a zero, you need to make sure the discrepancy is addressed.

Of course, you can’t just automatically assume that your short sale is obligation-free. IT depends on your lender- some will automatically file a deficiency judgment and make you pay some portion of the discrepancy between what you earned on the escrow and what you owe the bank.  Also- the federal government may be able to tax this difference, if the bank DOES pay for it, as income. Make sure you’re clear on the stipulations of your lender and the federal tax code.

The point is, after the emotional roller-coaster of having to give up your home, you need to stay on top of your finances. If you’re responsible and diligent, you might be able to get yourself a new home in just a few short years. But make sure it’s with a loan you can afford to pay!

If you’re thinking of getting a short sale done for your in-trouble home to avoid a foreclosure, you should know that a bank is not obligated to sell your house. When a  bank or lending institution decides to do a short sale, they have to basically eat the difference between the amount of the loan you owe and the proceeds from the escrow, which will necessarily be less. They don’t like doing this. A potential buyer can go through all of the rigamaroll of paperwork to pay for inspections, make an offer, put down the deposit, and get the sale process started. But as soon as they make an offer, the bank might then go ahead and attempt to convince you that you aught to refinance your home loan and stay in your house, so that the bank can avoid having to eat the discrepancy between selling price and what you.

But, a short sale contract in and of itself includes a stipulation by which a bank must approve the sale. A seller can get their money back in you are persuaded to refinance instead of making the short sale. The problem with this is that it ties up months of the buyer’s time and money, and the buyer has to basically start all over again. So any buyer that needs to get a house in a specific neighborhood or has time pressures may be inclined to go for a foreclosure house instead.

Buyers will look for clues in a short sale to help assure then that the bank (or you) are not going to pull out at the last minute. If you’ve moved out of the house, a seller will be much more likely to want to buy form you, because that suggests that you will not be swayed to try to refinance your house instead of selling it in a short sale. If you’re concerned that buyers aren’t making offers, consider moving out of the house or making efforts to make it look as if you are currently in the process of doing so, and you may have much more luck.

Another thing is to make sure your listing has the stamp of approval: “Bank Approved Short Sale”, which signals to potential buyers that the bank has approved the short sale, and only one need do so, so that  the buyer knows your insurer or other parties aren’t involved and won’t tie up the process.

Look out for the lingering effects of bankruptcies, foreclosures, and short sales, in that order. Bankruptcies have the worst impact on your credit, spreading out among many accounts over many years. Foreclosures are just your mortgage, so you may be able to repair your scores in seven to ten years. Shortsales, on the other hand, have an indeterminate amount of impact on your credit score, but certainly no more than a foreclosure, and very likely less.

Lenders will almost always be more sympathetic to homeowners who had to lose their homes through short sale instead of foreclosures. It shows a level of responsibility and dedication that indicates an applicant is willing to do legwork and takes care of what they can. You may even be able to get another mortgage within a year or two after a short sale, if you fenagle it right and can prove you were experiences undue hardship that is no longer ongoing.

A way to mitigate the effects of any home loss, but especially a short sale, it to maintain good checking and savings accounts, because a mortgage lender in the future will need a few months’ worth of bank statements.

Stay on top of your credit card payments, and apply for new ones with fixed-rate payments. Of course, don’t apply for too much, or you’ll look desperate or out of control. Small loans can also work to help reestablish credit.