- What is my potential liability after completing a short sale? What is a deficiency judgment?
Update: many Americans have been going through the hardest times of their lives, owning a Home is supposed to be the American dream. Not a nightmare, finally some relief in site.
The National Association of Realtors® praised the U.S. House of Representatives for passage of the Mortgage Cancellation Tax Relief Act, H.R. 3648, by a vote of 386 to 27. Since the early 1990s, NAR has advocated for repeal of the current law, which forces individuals to pay an income tax when they have had a loan forgiven or have had to foreclose because of their inability to pay their mortgage.
"Congress made a good decision that will affect many Americans who find themselves in a truly bad situation," "Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes."
FastPropertyBuyer.com expressed its commitment to continue efforts to make the horror of losing a home less burdensome for families. "This is not only about the subprime turmoil we are currently experiencing. This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax. The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.
Lender recourse: In some states and with certain types of loans, lenders can pursue a court decision called a "deficiency judgment" making you personally liable for the remaining amount owed to them above the short sale price. In some cases, the lender may ask you to pay a portion of the difference back in the form of an IOU.
The lender has sole discretion whether to pursue a deficiency judgment in those instances when a deficiency judgment is permitted. Unlike other loss mitigation companies that offer "basic" and "premium" services, at FastPropertyBuyer.com, as a matter of course, we diligently apply ourselves to every short sale case with the goal of negotiating with the lender to eliminate a deficiency judgment and to consider your debt as settled. Please contact us today at 800-729-0706 for a free consultation with one of our Short Sale Specialists so that we can be of immediate assistance to you.
Why would my lender agree to a short sale?
In most distressed mortgage situations, foreclosure is a last resort for all parties involved. The homeowner and the lender usually want to avoid foreclosure at all costs. That is why a short sale is advantageous to foreclosure and lenders are typically very motivated to pursue a short sale prior to foreclosure.
A short sale gives the lender the ability to cut its losses upfront thereby avoiding the expense and time of a foreclosure and potentially greater losses. Lenders want to make loans; they do not want to be in the business of owning and managing real estate. Whether the lender chooses to go through with a foreclosure or agree to a short sale, they are taking a loss either way, but in many cases they would take less of a loss with a short sale and resolve the matter in a comparatively shorter time frame. In nearly every case, a short sale offers a significantly better return on the lender's investment than a foreclosure does. Please contact us today at 800-729-0706 or http://www.beatyourbank.biz for a free consultation with one of our Short Sale Specialists so that we can be of immediate assistance to you!
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Short Sale Questions? Get Answers Here.
We understand that this process can be embarrassing, and let's face it, no one wants to be in this situation. But, understand you are not alone. Over 4 million other US families are facing foreclosure right now, according to the Associated Press. In an effort to educate our website users, we have put together a number of frequently asked short sale questions. If you need additional information, please fill out our short sale contact form.
Q: What is a short sale?
A: A short sale is simply where your lender accepts less than what you owe as payment in full at closing. Lenders have been accepting short sales for years. And, if you're upside down and need to sell, you may qualify to short sell your house. Think of it like this... Let's say you let someone borrow $100 and before they could pay you back they lost their job and couldn't pay you back. Then, one day they called you up and said, "Listen, I don't have the $100, but I do have $80. Would you accept this?" Of course you would. Why? Because it would be better to get the $80 back than nothing at all, right? This is a short sale. Lenders accept short sales because, most times, they make more sense than getting the house back by a foreclosure. Right now, more than ever, banks just want to minimize their loss. If they can allow a short sale and avoid foreclosing on your house, they will.
Q: What can I expect after I fill out your contact form?
A: Once you fill out our contact form, we will call you and make sure your house qualifies for a short sale. We'll ask you some questions to establish; your mortgage balances, how many months behind you are, who your lender is, what repairs, if any, will be needed. We will then research your property and pull comparable sales data from your surrounding area to find your property's value. If your house qualifies, we can write up a contract and start negotiating with your lender to accept a short sale settlement so that we can purchase your house.
Q: Do you charge any fees?
A: No. We buy your house just like in a normal real estate transaction, but when we close your lender gives us a discount and writes off your bad debt. There are no up front fees and no fees added when we close. Our service is free to homeowners who need to short sell their house. There is no obligation to see if your house qualifies.
Q: Can you give me an example of a good short sale candidate?
A: Sure. Let's say Sally bought a house a few years ago for $200,000 and took out an interest only mortgage for $190,000. Her house is now worth $155,000 and she still owes $190,000. Sally lost her job and can no longer afford to make her house payment and starts to get behind on her mortgage, but she can't sell because she owes more than her house is worth. She lists her home "for sale" trying to simply break even, selling for what she owes. Unfortunately, her house sits on the market and inches closer and closer to a foreclosure auction.
She could call us, we could put a contract on her house and negotiate a short sale on her behalf with the lender. We would buy her house at a discount based on what her house is worth now. We can even suspend the foreclosure sale if there is a scheduled date. When we close, the lender writes off the bad debt and Sally moves on with her life.
Q: Do you buy short sale properties in my area?
A: We buy properties all across the country. Buying a property here in Atlanta, GA or in Los Angeles, CA is no different. No matter where you are located, we will consider buying your property.
Q: Why in the world would my lender accept less than what I owe?
A: Banks do not want to get your house back. Let me repeat that, banks do not want to get your house back. When a bank takes a house back in foreclosure, it is said that it costs them anywhere from $50,000 to $75,000. Your lender is interested in minimizing their loss. If a short sale is less of a loss than a projected loss from a foreclosure, your lender may accept a short sale, it's really that simple.
Q: Will my lender forgive the balance owed when short selling my house?
A: This is something that our short sale experts will work on. During the short sale process, we will request that your lender forgive the balance owed and not pursue you for the deficiency, and we get it in writing. If the lender insists you owe on the balance forgiven for a short sale, it will then be up to you to proceed.
Q: Are there any tax consequences after a short sale?
A: You will want to discuss this with the IRS or your accountant. Due to new tax rules seen here, Mortgage Forgiveness Debt Relief Act, your forgiven debt will not be recognized as a taxable gain.
Q: What is the difference between listing my house with an agent or selling my house to you?
A: Two distinct differences. We buy your house. Your lender will not negotiate or agree on a short sale price without a written contract. You can list your house, but you will need to wait for a buyer and that could take months. When you call us, we can put a contract on your house immediately and we start negotiating with your lender right away. Plus, we have professional loss mitigation experts with many years of experience negotiating short sales who work directly with your lender. Finding the buyer is half the battle, getting your bank to agree to accept a short sale is another. Our short sale experts have a history of successful short sale transactions and connections with a multitude of lenders to make it happen quickly.
Q: Is there any guarantee that my lender will accept a short sale?
A: We make every effort to work with your lender and get them to accept a short sale, but we still can't make any guarantees that your lender will work with us. All lenders are different and every situation is different. One thing is for sure, they do not want your property back and many times they will accept a short sale if it makes sense for them. We come up with a win/win offer.
Q: How long is the short sale process?
A: The short sale process is entirely in your lenders hands. Our short sale negotiators work diligently to get our offers accepted, but the short sale process can still take up to 60-90 days and in some situations up to 6 months. Some lenders can have a response to us within 30 days while others take longer.
Q: My house is in perfect condition, will my lender still accept a short sale?
A: We are looking to purchase nice homes in nice subdivisions. We also buy executive homes, high end luxury properties and nice commercial properties. A short sale is dependent upon what you your property's current value is, not the condition or even what you owe.
Q: How will my credit be affected? Short sale vs. Foreclosure
A: If you're visiting our website, chances are you've already had some unfortunate circumstances that may be affecting your credit. However, a foreclosure could affect your FICO score as much as 300 points while a short sale might affect your score 75-100 points. Though both a short sale or a foreclosure are not marks you'd like to have on your credit report, generally speaking, a short sale may be better in the long run. While those with a foreclosure may not be able to buy another home for 2-5 years, families with a short sale and good credit may be able to purchase a home in 12-18 months.
Q: I'm a real estate agent with short sale clients, can I call you?
A: Of course. We work with agents every day. If you have a client who needs to short sell, we can put a contract on their house and you get your commission as usual when we close. The lender will pay your real estate commission and you don't even have to talk to the lender. We handle everything.
Q: I'm ready to find out if my house qualifies, what do I need to do?
A: Simple. Click on the big red button below and fill out our contact form. We will call you back promptly. If your house qualifies, we can put a contract on your house within 24 hours.
We Buy Upside Down Houses
Do you owe more than your house is worth? Are you facing foreclosure and need to sell your house? We are the nation's premiere short sale home buyer. We specialize only in buying short sales. If you can't sell your house because you're upside down and want to avoid foreclosure, we can help.
If your house qualifies for a short sale, we can put a contract on it within 24 hours. Our team of professional short sale negotiators can work with your lender to accept a short sale settlement so you can move on with your life. Get started right now. Fill out the form below.
Providing many solutions in real estate and banking. Commercial or residential financing. Buying houses pre-foreclosure, subject to, or short sales!
Are you behind in payments and facing a foreclosure of your home?
Are you behind in payments and facing a foreclosure of your home?
Are you behind in payments and facing a foreclosure of your home?
We might be able to help!
We understand that going through foreclosure process, risking to lose your home and ruin your credit is a dramatic experience. It's also a huge financial burden.
The simplest way to stop the foreclosure process is by bringing the loan current. That typically requires a large lump sum of cash to cover:
* All missing payments,
* Late fees,
* Attorney's fees,
* Very often the cost of inspections and appraisals is also added,
* Sometimes the title report costs are added.
Often the pain of trying to deal with uncooperating lenders and their lawyers is too much to bear emotionally in addition to the financial stress.
There are different ways to deal with foreclosure which we'll cover in the section below.
For some home owners in foreclosure the financial burden and the emotional pain is so high - they prefer to leave and start from scratch at a new place of residence.
In that applies to you - the best alternative that will minimize the impact on your credit is to sell the property to a professional buyer who has funds and can perform.
If you already have made up your mind about selling your home now, please visit our page or simply call our office. http://www.coastalonedayfunding.net
Would Like To Try and Keep The Home, But Have No Money to Stop Foreclosure?
If you're interested in staying in the home and YOU HAVE A LOT OF EQUITY we might be able to offer you a plan where we put up the money to bring the loan current and stop the foreclosure while you'll be able to stay in the home.
If this option interests you, please call our office right away to discuss it.
Not Sure Yet What To Do?
If you don't know what your options of dealing with foreclosure are and haven't yet decided what you want to do about it - we recommend getting our FREE Report.
FREE Special Report Reveals: "7 Ways To Stop Foreclosure"
This report is for you. There are some things you CAN do to stop foreclosure and save your credit. Now, there are no miracles, not all of the methods described in this report will be applicable to your situation.
If you have no equity in your home, and you have not made payments for over 12 months, you have already filed bankruptcy and fallen behind on your plan, the strategies outlined in the report will not be helpful to you.
If, however, your situation is not that dramatic, there are still some steps you can take to avoid foreclosure. http://www.coastalonedayfunding.net
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