» Solving Short Sales

Forgiven Debt Not Always Taxable

admin — Sat, 07 Nov 2009 18:13:24 +0000

A question that often comes up when contemplating a short sale is the matter of how forgiven debt is viewed by the IRS. Prior to the Mortgage Forgiveness Debt Relief Act of 2007 any forgiven debt was considered taxable as income. In most instances that is no longer true. Check out IRS page – Mortgage Workouts, Now Tax-Free for Many Homeowners; Claim Relief on Newly-Revised IRS Form

Wondering if a short sale is your best option? Call us for a free consultation.

B of A adopting new Short Sale Platform

admin — Wed, 04 Nov 2009 16:10:25 +0000

In an effort to deal with distressed properties prior to foreclosure Bank of America is adopting Equator, a short sale module that will enable borrowers and short sale agents to submit documents and check status online 24/7.

The Equator Platform, formerly REO Trans, is a web based electronic system designed to automate the short sale process and improve communication and approval timelines.

In another sign that short sales are increasingly becoming the preferred method of dealing with properties at risk of foreclosure it is reported that B of A has expanded its personnel in the division handling this type of transaction.

With short sales typically resulting in a higher net sales price look for this type of system to be adopted by other major lenders.

No Cost Loan Mod Advice

admin — Wed, 04 Nov 2009 00:37:21 +0000

Before rushing into any short sale we encourage those having trouble making their mortgage payment to consider attempting to negotiate a loan modification with their current lender. It’s possible that an agreement can be reached thats a win-win for all concerned. If you are in this situation please take the time to educate yourself on the options available.

The first thing you need to know about loan modifications is that help is free. Don’t fall victim to one of the many scams that target homeowners going through tough times. You should never be asked to pay an upfront fee for counseling and absolutly never be asked to sign over the deed to your home.

If you are struggling to make your house payment there may be help available to you under the Making Home Affordable program. This plan is designed to assist millions of homeowners who purchased their homes prior to January 1, 2009 with a first mortgage of $729,750 or less and a PITI payment that exceeds 31% of the family gross income.

Keep in mind that eligibility is not the same as approval. The successful approval of a loan modification depends on a number of factors including the borrowers ability to make payments at the modified amount.

Read the information on the Making Home Affordable site and feel free to contact us to discuss how to get prepared before contacting your lender with a loan modification request.

Even when successful there are times that the terms a lender may ask for on a modified loan are not sufficient to prevent a hardship. In the event you are unable to negotiate an acceptable loan modification then a short sale of your property may be your best option.

As always we encourage homeowners in this situation to consult a real estate attorney as well as a CPA. If it is determined that a short sale is your best course of action we can meet with you to go over the required paperwork and discuss your situation in detail.

Help with Short Sales

admin — Wed, 04 Nov 2009 00:02:22 +0000

Short Sales are on the rise in our real estate market for a variety of reasons. Many home owners purchased homes with adjustable rate mortgages and with the downturn in the economy have been unable to continue making payments and are unable to work out loan modifications with the mortgage holder.

In addition to rising house payments many home owners have been impacted by unplanned for events such as job loss or transfer, divorce or illness resulting in the inability of the borrower to continue making house payments.

Not only is the prospect of losing a home financially troubling it can be an emotionally difficult period as well. No one purchases a home with the thought that a few years later they will lose their home and investment. When events transpire that cause the homeowner to be unable to continue to make payments on their mortgage it is not uncommon for them to feel some sense of remorse or failure. Because this event is personal in nature some find it difficult to discuss the situation with others and are reluctant to seek assistance. Because the short sale process can be very complicated some home owners just walk away from the home or simply wait for the foreclosure process to occur. More pro-active homeowners may decide that a short sale is the right decision for their situation but may be unsure on how to proceed. If you find yourself in this situation there are a couple things to keep in mind.

Your neighbors need not know that your home for sale is a short sale. The home is marketed much the same as any other home for sale and all references to it being a short sale are in the private remarks section of the listing and only shared with real estate professionals and buyers interested in purchasing your home.
There is no cost to the home owner to use the professional services of a Realtor to assist with the short sale process.
A successful short sale will avoid the neighborhood trauma of foreclosure and blight and be a much healthier solution for your neighbors quality of life and property values.
Not all Realtors have the experience or knowledge to successfully assist you through the short sale process.
Your Realtor should be able to assist you with all the forms and documents required for a short sale, handle bank negotiations, understand how to complete an accurate BPO showing true market value and develop a pricing strategy that results not just in generating a buyer purchase offer but in a purchase offer that is acceptable to the mortgage holder (lender).

If you are ready to get started on the short sale process you should be prepared to spend some time putting together the short sale package (we can e-mail you all forms). Here is the basic list from start to finish.

1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.

2. Handwritten hardship letter showing compelling need to sell.

3. Short Sale Listing Agreement.

4. BPO of comparable sales from Listing Agent.

5. Last 2 years W2 Forms all borrowers.

6. Last two years tax returns all borrowers.

7. Last two months bank statements all borrowers.

8. Last two pay stubs all borrowers.

9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.

10.Detailed estimate for any repairs needed.

11.Fully ratified Purchase Agreement.

11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.

Feel free to contact us for additional information or to get started on the process of selling your home. Our short sale team has a proven track record of success and we look forward to being of service.