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Real Estate Short Sale Questions and Answers |
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Question: Short refi or short sale, what will be the problems or delays?
I tried to refi, but when the appraisal came out, the value was low. it is $50K lower than the purchase price. So, refi didn't happen. I called my lenders. 1st lender said they cannot modify my loan because I won't be able to afford it. They suggested that I call the 2nd lender to work out a short pay. The 2nd lender said that they will send me the materials to fill out the request for a short pay. Ocwen is my second lender. They sounded that they are willing to work with me. It sounded too good to be too easy to do. I have a good credit score. My question is, what can delay Ocwen to agree for the short pay?Answer: 2 things to keep in mind;
if the first lender is not paid ...
2 things to keep in mind;
if the first lender is not paid by you--
and forecloses, the 2nd lender has to pay off the 1st mortgage to keep
his loan good.
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you might consider selling PART of the house--1/4 or 1/3rd, whatever,
so that you can keep the house and
stil live in it.
lastly--consider putting in a small
biz into the house to help pay the
mortgage.Question: I'm in the market to buy a house. What would be the pros/ cons of buying a house that's listed as short sale?
I'm in Houston and I want to buy a house. I found a few houses that I like and two of them are listed as short sale houses. What does this mean? What are the advantages/ disadvantages of doing this? I don't want to buy until 3-4 months from now, so would a short sale still work for me or would I be better off going the traditional route?
What would be some good questions for me to ask the seller to deterimine if this is a good deal or not?Answer: A short sale is one in which the lender involved with the ...
A short sale is one in which the lender involved with the current owner agrees that the owner can sell the property for less than is currently owed on it. Short sales may or may not be a good deal. Each one stands on its own merits or lack of merit.Answer: A short sale means, simply, that the bank is not going to ...
A short sale means, simply, that the bank is not going to get paid the full amount of they're owed, so they will have to approve any offer made on the home - even if the homeowner agrees to the offer. If the bank says now, then you do not have a binding agreement to purchase the home.
Now, on the good side. Banks are not in the real estate business, and if they think that this is the best deal they'll get (and will save money since they don't have to go to foreclosure) they'll possibly take your offer. It takes sometimes up to 30 days to get an answer from the bank, though, so your time frame of 3 - 4 months may work for them.
See a Realtor to help you through this (not the one representing the Seller) and I wish you the best of luck. It's a little more work, but can reap big rewards for you in terms of buying a home way under value.Answer: just because the owner owed more than it could possibly sell ...
just because the owner owed more than it could possibly sell for does not make it priced right. Those hummers and plasma tv's they purchased with mortgage money they borrowed to buy it in the first place will add up.Answer: the pros, you are most likely getting a property under ...
the pros, you are most likely getting a property under market value\ with equity, this is really good
check the area, see what the comparable properties(same room, bath, sq fee) are selling for
the cons, since your buying from the bank, most likely as is sale, w\ not much warranty, so do your homework and hire an inspectorAnswer: I always adviseclients to have a whole house inspection ...
I always adviseclients to have a whole house inspection done, regardless of the type of sale. Short sale are where the lender has agreed to take less rather than foreclose. If you aren't ready to buy any of these house now, there is a good chance they won't be available when you are ready. I suggest you begin your search when you are ready to make a commitment.Answer: Short sale means that the previous owner owed more than the ...
Short sale means that the previous owner owed more than the property is now worth. A short sale is when a bank forgives a certain amount of the debt to allow a sale to go through (and to write off a bad mortgage).
Pros - the mortgage will not be such a big obstacle in the sale of this house for the seller (i.e. he won't be restricted by what he owes and what he can afford to lose in the sale).
Cons - often houses in which the mortgage wasn't being serviced often have other areas that weren't being serviced. Do a good house inspection - a lot of times when money gets tight, maintenance takes a back seat, and sometimes the owners get angry at their bad investment and take in out on the house.
Besides that, you can find great deals in houses that are short sales. Especially nowadays with the record number of foreclosures. If a person where buying a house at retail value now, and not looking for these kind of deals - then I say they deserve to find themselves upside down in the next couple of years as the market continues to decline (traditionally, the real estate market has a 10 year cycle - so don't buy into the interest groups positive spin that this will all blow over next year, especially when it has been building over the last 10 years).Question: I went through a short sale this summer Taxes?
Hi, I was in a very bad situation with my home and I need to get out of it, no way I could afford it anymore. I sold my home and now renting. I did not have to pay anything out of pocket, the bank picked up the tab on what was short to close, 67k. I did not have anything left, I got stuck in a adjustable rate mortgage and could not deal with the payment and of coarse the house value droped big time too. So hear we are in a home worth almost 70k less. Well I was talking to someone and they said Bush admistation "Taxes" will treat the 67k like a lottery winning. meaning I will have a huge tax bill to owe Bush. I hear of capital gains tax this was a loss. I also have 20k in creidt card debt I am trying to clean up " I pd 4k in that with lower home costs.: anyone hear of this and please advise.
The bank/realitor did not speak any of this.Answer: Bush's plan never came to pass. The rules on cancelled ...
Bush's plan never came to pass. The rules on cancelled debt stayed the same.
Visit IRS.gov and read.
http://www.irs.gov/newsroom/article/0,,id=174022,00.html
When you purchased your home, you *may* have a non-recourse loan meaning the bank can't necessarily ask you to pay the $67K.
If you ever refinanced your home, it's a recourse loan and yes the bank can ask for the $67K or write it off. If they write off, you generally could have taxable income.
Plus if you paid $300K and short sale for $200K, you would have a non-deductible loss of $100K--which can't be used to counteract the cancelled debit income. (Do not forget to report the short sale. Otherwise the IRS will think you had $200 in capital gains.)Answer: From what I have read, the Bush plan doesn't address ...
From what I have read, the Bush plan doesn't address this issue.
What has happened is that you owed X amount of money to the lender. When the short sale was authorized, the bank took a loss on the loan. The balance (67k) can be attributed to you as income. Some lenders will send a 1099 to you at the end of the year for the income. It is not capital gains, it is relief from a debt that can be counted as income. Some lenders do not issue a 1099, but if you get one, you are going to be taxed.Answer: Andy, it isn't Bush's taxes, it is the tax law. And ...
Andy, it isn't Bush's taxes, it is the tax law. And that law has been on the books for decades, Bush had nothing to do with it. Though I am no GWB fan, it isn't his fault.
You can thank the Democrats for doing nothing. They said they were going to in October, but then decided voting on crap like the resolution against Turkey and for Christmas was more important. So, if you want to blame anyone, blame Congress.
Reality check: You didn't "get stuck" in an ARM, you choose to buy a house with an adjustable mortgage. I realize your situation sucks, but it isn't the governments fault.
Personal responsibility is sure lacking in this country.Answer: If you realized a capital gain on your short sale, you ...
If you realized a capital gain on your short sale, you report the gain on schedule D, and pay tax at the long term (or short term) capital gain rate.
The amount which your adjusted basis exceeds the fair market value sale price of the home is a non-deductible loss for you because you used the home as your personal residence.
If the bank sends you a 1099-C Cancellation of Debt, regarding the 67K, then you need to pay regular income tax on that amount, the same as a salary or wage. If your loan is forgiven. it is regarded as income to you. These IRS rules have been in place for years. They did not originate with President Bush. Contact the attorney who you used for your closing.
You might be able to avoid the tax liability if you can show the IRS you are insolvent, or bankrupt. Contact your attorney for advice regarding this as soon as possible.
It's also possible the bank could pursue a judgment against you for the 67K shortfall.
H.R. 3648 Mortgage Forgiveness Debt Relief Act of 2007 has presently been approved by Congress. It has not yet been signed into law, and there is no retroactive feature that would be helpful to you. Other similar legislation is is currently pending before Congress. It's unknown when or if the bills will ever become law.
EDIT: It is not a good idea to take a "wait and see" attitude. Contact the bank, and your attorney, and plan out in advance the best course of action for your situation.
Good luck.Answer: This is not automatic - it depends if your bank filed a ...
This is not automatic - it depends if your bank filed a 1099, spelling out that loss they incurred as "income" on your part. They may not have, a lot of banks are tracking A LOT of foreclosures right now. The best thing would be wait and see if you get a 1099 in the mail. If you do, then your best bet would be to talk to a real estate attorney (or CPA) who specializes in foreclosures and bankruptcies.Answer: Don't sweat it, get a good CPA to file your taxes, if ...
Don't sweat it, get a good CPA to file your taxes, if you were insolvent when the short sale took place and the only other option was bankruptcy the IRS will not come after you for capital gains, this has always been the case. Bush did not do anything for anyone.
More info at homehelpers911.com.
Take care!
RJHQuestion: When buying a house, What are the differences between a "Short sale" and a "Bank owned" house?
Answer: In a short sale, the owner still has possession of the ...
In a short sale, the owner still has possession of the house: "A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. "
Bank owned: the bank already has possession.Answer: A short sale is when the bank is willing to be repaid less ...
A short sale is when the bank is willing to be repaid less than the total amount owed on a mortgage. This is really more of a problem for the current owner, than the buyer.
A banked owned house is one that has been foreclosed on and is now legally owned by the bank. They are selling it to try to recoup as must of their investment as possible.Answer: There is also another SMALL difference between a "short ...
There is also another SMALL difference between a "short sale" and a "bank owned foreclosure". This detail is that in a short sale you are PURCHASING the property from a old owner; either owner occupied OR investment property that has a PROVEN inability to pay thier costs of keeping the home. You MAY want to check to see what else besides the house payment the old owner failed to keep current as in tax liens, water & trash bills, repairs on the house, etc.
Both sellers are required to provide a "free and clear title" and ensure that the property is free of liens but while the bank can afford to correct any back liens; will a short sale owner who is unable to pay his house payment be able to come up with cash to clear back liens?? And while a bank can pay for repairs, an old owner again may have not kept up on house maintance and you will have less bargaining power if you want something fixed prior to sale date.
In a bank repo you are negotiating with the bank alone; in a short sale you have to deal with the old owner AND the bank who holds the loan.
Do not do either of these transactions based on the skill you got watching tv. Get professional help and use a realtor or real estate attorney, a property INSPECTOR, a property apprssor. and a good tax accountant.Answer: Bank owned neans you purchase it from a lender who has taken ...
Bank owned neans you purchase it from a lender who has taken title thru a foreclosure. "Short sale," means you buy from the equity owner, but the bank who holds the mortgage agrees to take a lesser amount than the mortgage balance -- usually because the property has dropped in value to less than its mortgage balance.Question: can someone deal with the bank on a short sale without my deed in their name?
Answer: Is their name on the Mortgage, is your's?
Is their name on the Mortgage, is your's?Answer: Your real estate broker can, and is the customary contact. ...
Your real estate broker can, and is the customary contact. The bank requires you to sign a release form. You could sign one for them to talk to anyone, but they really prefer someone who knows what they are talking about.
Under no circumstances would you need to add a person to your deed for them to talk to the bank.Answer: Yes, as long as you've given your lender permission in ...
Yes, as long as you've given your lender permission in writing to talk to your designate. |
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