National Association of Realtors map from December 2016
If
you received a notice of foreclosure, are contemplating a
short sale, or have questions on loan As an
experienced agent and Equator-certified specialist,
Bill Baker has the experience to help you through this difficult and
emotional process.
All
conversations are confidential. The Bakers have helped both
buyers and sellers navigate the short sale process.
A seller
asks: I was reading online that if the
short sale goes through, we can be held responsible for
the difference between what we owe and what the house
sells for. Is this generally the case?
We'll help you with the short sale process, pre-qualify
you, and if you are approved, the primary lender will
forgive the debt. If there was a second or HELOC
on the property, then that needs to be negotiated prior
to the closing of the property.
If you have a second mortgage
such as an equity line of credit (HELOC) or a 80-10-10 or
80-20, the situation is more complicated.
Seconds must be negotiated upfront in the short sale
process. In almost all cases, this is negotiated
before closing in the form of a seller/buyer
contribution. So far we haven't heard of the PMI
companies chasing buyers on a primary residence after a
short sale. In most cases, they write it off their
books. But be aware that they retain the right to
pursue at a later date if this is not negotiated upfront. Our
short sale attorney tells us that that the MIP companies
are going after the lenders, looking for misrepresentation
(fraud) in the loan documentation process.
Obviously, the lenders have deep pockets and their chance
at getting money out of them is much better than with the
individual homeowner. If
a declared bankruptcy is on the horizon or has already
happened, a short sale is still possible; however, it
becomes much more complicated. Contact the Bakers
for more info at 847-927-2728.
modifications, don't panic, call the Bakers.
That leaves three concerns.
The IRS (which had the right to add the forgiven debt to
you as taxable income), the HELOC, if any, and the
MIP/PMI company, if any. Below is the IRS Mortgage
Forgiveness Debt Relief and Debt Cancellation Act.
Note this runs through 2014. The IRS does not add
the forgiven debt to your income if it is a primary
residence. That is great news. The property must close in
2013.
Short
sales are transactions that take place between a buyer, seller, and
seller's lender. The seller's lender agrees to take
less than
it is owed because the proceeds of the sale are
not enough to pay off the entire amount owed the bank.
Many short
sales are never completed by the lender and after months of trying,
all parties give up. MIP, junior liens, hardship, lien holder
experience, and many other variables come into play. We run a
property through our short sale checklist before suggesting you
write an offer to see if it looks like a viable short sale. There is
no point waiting around tied up for months with a contract to see if
the process can even be completed.
The Bakers have extensive experience in short sales and can help both sellers and buyers with the process. Contact the Bakers if you are interested in this type of sale and need professional representation. You will need an experienced lawyer as well.
Below is from IRS publication 4681. Note IL is a recourse state
Connect With Us
Contact us today for more information - 847.255.9346
IvyHillHomes@gmail.com