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Real Estate Short Sale Questions and Answers |
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Question: Will my bank agree to a short sale of my house ?
I heard my bank(mortgage lender) will not be agree to a short sale of my house when there is a Private mortgage insurance policy on my mortgage loan. Is this true?Answer: It depends on what country and what bank! Not enough info ...
It depends on what country and what bank! Not enough info for me! Think you should call to the support team(of a bank) or something like that! There you can ask all questions about it! It'll help! Wish you luck!Answer: Your lender is the only one who can answer that question, ...
Your lender is the only one who can answer that question, because it may affect their business policies. Each lender may have different policies. While we love to help people here on Yahoo, there are some questions you need to go directly to the source for.
Lenders are doing all kinds of things these days because they don't want the property back, they don't have the man power to handle what they already have back. So if you aren't willing to fight for what you have, then I suggest you just begin the process, put your house up for sale and take the best offer you can. Just make sure it covers the mortgage balance, they don't care about what expenses you may incur. So you could have out of pocket expenses to deal with.Answer: Call the lender and find out, in their decision is going to ...
Call the lender and find out, in their decision is going to be how much of a discount are you looking for on the short sale, also if you have savings they may not approve it eitherAnswer: Sadly, many banks will not speak to you about a short sale ...
Sadly, many banks will not speak to you about a short sale until you start missing payments and they are sure you can't afford it.
Suze Orman talks about this a lot on her t.v. show. Try looking at her website.Question: Foreclosure/Short Sale advice...?
I bought a condo 2.5 years ago in Michigan. The economy is so bad here right now and property is not worth what it was. I owe more then it is worth. I did an interest only, 0 down mortgage. I want out. I am about to be done with college and I think I may want to move out of state. I am very behind in my condo assoc. dues and they sent me a notice of lien. My place has been on the market for two months and I have only had one showing and they said that it was over priced, ha. I am trying to do a short sale. If that doesnt work that I want to try a deed in lieu (the place has to be on the market for 90 days from them to consider it). What I want is advice. I really don't want to screw myself with having a foreclosure but If the short sale doesnt work and the bank does not accept the deed in lieu, I may have to do foreclosure. Is this Lien going to hurt my plan? Any advice?Answer: The lien may complicate matters. If you can swing it, pay ...
The lien may complicate matters. If you can swing it, pay up.
An interest only mortgage is a BAD idea for exactly the situation you find yourself in. You build up NO equity in the property and if housing prices decline, you end up owing more than the property is worth.
A Deed in LIeu is better than a foreclosure, marginally, particularly for bank and they may negotiate with you. A foreclosure wipes out all junior liens, such as the condo association fees. You want to avoid having the bank issue you a 1099C if at al possible, keep that in mind in your negotiations.
Speak with your lender at length and fully explore your options. They are more willing to negotiate and work things out now than last year. Also speak with attorney, accountant to guage the impact of the various solutions offered on your credit and tax liability. A 1099C treats the forgiven amount as income to you--big problem at tax time.Answer: The condo association lien will just make the buyout a ...
The condo association lien will just make the buyout a little more expensive, whether that occurs when you sell or when someone buys it at a foreclosure auction. In this housing market your chances of a deed in lieu are probably not very good. Banks already own so many houses and really don't want more, though if you are a high foreclosure risk they might consider it. My advice is to accept ANY offer you receive that you feel the bank might accept. From their point of view a short sale is probably better than a foreclosure auction. And ANY option is better for you than foreclosure.Answer: I would stick with the short-sale. Make sure your Realtor is ...
I would stick with the short-sale. Make sure your Realtor is a short-sale specialist, and make sure he or she has active contact with your bank.
One thing with a foreclosure is it will REALLY hurt your credit - a short-sale will too, but at least with a short-sale it looks like you tried to resolve your credit issue.
If the short-sale doesn't work, what about renting out your place until the market turns. Maybe you can work out something with the HOA assoc to pay little by little to bring it current.
If you do move, landlords and employers will be looking at your credit, so I would say the last thing you would want is a foreclosure.
You may also be able to get your bank to do a loan modification to get your payments to a level where you can afford them.
TamaraAnswer: Hi,
I used "Credit Solution" to settledebt ...
Hi,
I used "Credit Solution" to settledebt and avoid foreclosure.They managed to reducedebt up to 58%.It's legitimate.I came across this company on NBC News Special Edition.Check it out here:
http://click.linksynergy.decenturl.com/credit-solutions-credit-consolidatioQuestion: We are looking into buying a short sale. The listing price is $250000, can we still put in a lower offer?
We would like to put in an offer that is lower than the price that is listed. The listing price is already a deal, but this house is almost in foreclosure, and we love it, but cannot afford the listed price. I'm not too familiar with short sell/sale, and I'm just looking for more info. I don't want to insult or seem less interested by putting in an offer for less. Any advice or information???Answer: Can always try since you do not know the situation behind ...
Can always try since you do not know the situation behind the short sale and the lender, worst thing they say no, but in this market if you come with a serious low offer then I would have to believe they may consider it, or the lender might reject it as well, too many factors
just go for it, remember fall in love with the deal and not the house and you should do well in the long runAnswer: Yes, you can and should put in a lower offer. When it comes ...
Yes, you can and should put in a lower offer. When it comes to a short sale ultimately the bank is who decides to accept or reject the offer.Answer: Yes, you can offer anything you want. Its possible if you ...
Yes, you can offer anything you want. Its possible if you come in really low that you'll insult the seller, but quite frankly, thats the least of their worries. The thing is, if you offer less, it may be a matter of they cannot accept the offer- that what they will clear is less than what they owe, and the mortgage company wont let them take the deal. But, you wont know until you have offered it. The way things are going, some mortgage companies are willing to take a small loss on a short sale in order to not deal with a foreclosure. But I'd act fast, the longer the process takes before a deal is reached, the more likely the home will go into foreclosure and be sold at auction.Answer: A short sale is successful only when the bank or mortgage ...
A short sale is successful only when the bank or mortgage holder agrees to accept less than what is owed as full payoff on that property. (Whether or not they go after a deficiency judgment is between the bank and the mortgagee, and really has nothing to do with the sale itself.) With that being said, you can offer whatever you want or whatever you and your agent decide is reasonable, but some banks would rather foreclose on the house than negotiate a short sale. Even if you offer full list price, there is no guarantee you will get the house. Have you spoken with the listing agent? Have they given any indication as to their communication with the bank? It is essential that the listing agent is able to successfully communicate with the bank, otherwise a short sale just won't happen. As a buyer, you must be willing to be very patient as it could take several weeks for the bank to even respond to your offer and there will likely be several bumps along the way. Good luck!Answer: This is a buyer's market, and if the home is in ...
This is a buyer's market, and if the home is in foreclosure, it is likely that the bank will be happy to take whatever they can get. In a short sale, they are already accepting a sales price that is less than what they are owed, so I would go ahead and offer what you can afford. They won't be offended.Answer: YES, GO TO 50000 THAT'S WHAT THEY ALWAYS LOOK FOR THEN ...
YES, GO TO 50000 THAT'S WHAT THEY ALWAYS LOOK FOR THEN GO U BY INCREMENTS OF 5000Answer: Well, when I found the financing for a short sale last year, ...
Well, when I found the financing for a short sale last year, the buyer did make an offer for a lower price, did get a discount over that price, and did get to buy the house. Why don't you find someone to represent you and make an offer for you? Buyer's agents are paid by the seller, so there's no financial obstacle to having one. The difficult part is to find one more interested in helping you than in getting the commission. Interview some agents, and if they start selling their virtues and don't listen to you, send them packing. If they do listen to you, then ask them to represent you and make what they think is a reasonable offer for the property. Good luck!Answer: In a short sale case your offer has to be accepted by the ...
In a short sale case your offer has to be accepted by the seller AND the lender that is about to foreclose on the seller.
It's a tricky situation, and you're going to need to make sure that your agent is familiar with short sales. It's unlikely that you will be able to close in 30 days, and you'll likely have to have a good deal of earnest money to keep the lender happy. Be aware that the seller will make no money off the sale of the home - a short sale means that the lender is agreeing to allow the current owner to sell the home for less than the outstanding mortgage, the lender will be losing money and won't be giving a cut to the seller. This could make the purchase difficult.
There are a lot of issues that your agent should be able to help you with, which is why it's important to have an agent with short sale experience. Please read the article (link) below for a better idea of what you might be dealing with.
I applaud you for realizing that you cannot afford the current asking price, when you love a home it's easy to stretch yourself too thin.Answer: Stacy L has the right idea. In a short sale situation the ...
Stacy L has the right idea. In a short sale situation the bank has already agreed to accept less then what is owed on the property. This was done by the current owner contacting his lending institution and telling them he can no longer afford the payments and would they accept less as payment in full. the bank then went through the process of determining what they would accept as a payment in full for the loan. This is the amount the short sale is acceptable.
How close is the house to foreclosure? banks do not work quickly and if you ask them to accept less then what they already figured out then they must go through the process all over again. This will take time, at least a few weeks.
It also has to be in the banks best interest to do a short sale instead of foreclose. Remember, they can foreclose and sell the house. If they think they will get more money by foreclosing (remember, they already have the process started and are apparently close to completion) then they will foreclose.
For example, if the open market will command a $250,000 price for the property and you are offering $200,000 the bank will have to say it is better to take the $50,000 shortfall instead of foreclosing. What would be the incentive for the bank to take $50,000 less since they have already spent the money to get the foreclosure process started? Most banks know what the house will command in the free market and won't go much below that in a short sale.
Since this home is so close to foreclosure the short sale will help the current owner more than it will the bank. They are already 3/4 of the way through the foreclosure process.
Good Luck!Question: What's the difference with Foreclosure, short sale, and repo?
Answer: Foreclosure is when you have stopped paying the bank for the ...
Foreclosure is when you have stopped paying the bank for the property you are living in and they kick you out. Essentially, it is the same as a "repo" but the banks will usually turn around and sell the foreclosed property immediately (as they have no interest in owning a lot of properties). A Repo, I believe, is the same thing, but that applies to stuff other than real estate.
A Short Sale is a relatively new concept where you know you can't make payments any more and you ask the bank to sell the property off and relieve you of the debt. In other words, you get out of the agreement and, if the foreclosure sale goes through, the bank doesn't black mark your credit for it. (Where a foreclosure will show on your credit report).
What most people who are selling in Short Sales don't realize is that if the property doesn't sell, it will still foreclose and ruin their credit. I've looked at many short sale properties where the current owners live there and they are trashing the place. No one will willingly by a trashed home, so they're setting themselves up for foreclosure instead.Answer: The previous answer was pretty good and almost ...
The previous answer was pretty good and almost complete.
A foreclosure is when payments aren't made on a loan that is secured by real estate. After a period of non-payment (while trying to collect) the bank eventually petitions a court for possession since they aren't getting paid. The property usually goes to auction at a courthouse. If someone else buys the property, great, but what usually happens is that there are no bids for what is owed and the bank takes possession. Then the bank then owns that property and tries to sell it (REO - real estate owned).
A foreclosure is bad news on a credit report and usually only happens after being 90 days overdue for quite some time. An aggressive lender can still pursue the difference between what they were able to get for the house and what was owed. They can send that to collections and try to garnish your wages over it. Many are not doing that right now, but they have every legal right to do so.
A short sale is where the lender has agreed to take something less than the balance of the loan as complete payment. It can be attractive for the bank since they don't rack up all of the lawyer's fees approaching foreclosure and they won't own the property after the auction. Short sales aren't new, but their prevalence is. There are many more of them going on today than in the past (because the lenders are overwhelmed with foreclosures and just want to be rid of some of these headaches).
A short sale is a negative on your credit, but not nearly as bad as a foreclosure. The difference between the sales price and what is owed can be considered income to the borrower (temporary halt on federal taxes but not state right now).
A repossession is usually for physical property, like a car or a TV or some other piece of personal property. The process is almost identical to a foreclosure with notice of non-payment, a court date and then physical repossession of the item(s). Sometimes a foreclosure on a mobile home is called a repo. Repo generally isn't used in real estate since possession means something different.
good luck!Question: Short sale vs Foreclosure and taxes 1099 in California?
What will the tax issues be on my home that I owe 475,000.00 and the short sale is for 325,000.00?
Will the same tax issue also apply if it went to foreclosure instead?
The amount I owe is from "purchase money" loans. I have a 1st for 400.00 and a 2nd for 75k.
My agent said the 2nd is going to accept 3 or 4k from the 1st to call it even?
Does Bush's HR 3648 (Debt forgivness) apply to me?
I've been out of work for 8 months and have not been able to make the payments. I also went through a divorce at the same time. I also have c/c debt, but am making the payments on all but 1 of the c/c's. I only have about 6K in the bank and only a old car and motorcycle (paid) as assests.
I thank you in advance for your help. I know there are several questions to answer. Thanks.Answer: I found an informative Q & A on the Mortgage Forgiveness ...
I found an informative Q & A on the Mortgage Forgiveness Debt Relief Act of 2007:
Q. How does the new law change this?
A. The DRA completely eliminates taxes on mortgage debt-cancellation for the majority of people who sold their home for less than its loan balance in 2007. The same rules will apply in 2008 and 2009.
The change could literally save millions of people thousands in tax dollars each, considering that an estimated 9 million homeowners currently owe more than their property is worth.
Q. How do I claim this tax break?
A. You must fill out IRS Form 982, "Reduction of Tax Attributes Due to Discharge of Indebtedness," and include it as part of your upcoming return. Despite its formidable title, the form can actually be completed in just a few minutes.
The document also must be accompanied by a 1099-C form, which the bank provides in order to verify the amount of debt that it forgave.
Q. Are all types of debt-forgiveness covered by the Debt Relief Act?
A. No. "Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision," according to a statement issued by the IRS last month. But such borrowers may qualify for "other kinds of tax-relief," the statement adds, details of which can be found in Form 982.
Q. Is there a limit on how much I can earn and still be eligible to avoid the tax on debt-forgiveness?
A. There's no limitation on earnings, but there is a limit on the amount of the mortgage that is involved: The new breaks apply only to married joint tax-filers who get debt relief if the balance of their home loan was less than $2 million, or single tax-filers whose balance was less than $1 million.
The limits shouldn't be a concern if you're a typical homeowner, but could be a problem if you have a supersize mortgage.
Q. Where can I get more information about these tax changes?
A. Start by getting your free copy of Form 982 and its instructions by calling the IRS at (800) 829-1040, or by downloading the information from www.irs.gov. After you have familiarized yourself with the rules, consult a tax expert to see how they apply to your personal financial situation.Answer: You will owe state income tax on the 150k and federal on the ...
You will owe state income tax on the 150k and federal on the amount you did not pay back on the second.
The same with foreclosure.Answer: Go for Short sale when you face an inevitable foreclosure ...
Go for Short sale when you face an inevitable foreclosure situation. This article explains why....
http://www.debtkid.com/short-sale-vs-foreclosure-which-is-the-better-option
Imp points
1) Short sale brings down your credit score by 200 points. But if you make your payments regularly you should be able to catch up quickly
2) Foreclosure stays in your credit report for years....
3) Earlier when the lender accepts an amount less than your debt, the difference is taxable. However, After the Mortgage Forgiveness Debt Relief Act 0f 2007 this is completed waived off.
Hope this helps!Answer: The federal act will help you out but won't take you ...
The federal act will help you out but won't take you completely off the hook. The state of CA is going to clobber you for full income taxes on the 150k that is forgiven. CA has an income graded tax rate schedule that doesn't look good for you. Income up to $40,345 is taxed at rates between 1-8%. Anything over $40,345 is taxed at 9.3%!! This means you are looking at a potential tax bill of ~$12,000 from the state of California.
Even a short sale is going to mess you up for a long, long time, but it would still be better than a foreclosure.
good luck! |
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