Don't wait until your property is foreclosed!
If you are facing default, consider putting your property on the market as a Short Sale.
Short Sale or Foreclosure? Which is the better option
for a home owner?
Of all the
available options-Foreclosure can be the worst!
In
a foreclosure, the inevitable result is not only do you lose your house but you also face the following consequences:
- The lender can get a deficiency judgment against you for the what
you owe plus their costs for the foreclosure action.
- Your
credit report will be adversely affected for many years to come making it very difficult to obtain any other kind of
credit.
- Credit scores will be lowered by 300 plus points affecting the ability to apply for credit cards, a car, apartment,
etc.
- The home owner will always have to disclose
they have had a foreclosure on any mortgage application.
- Many employers run credit checks on prospective employees and foreclosure is one of the top items that will
put a potential new hire in jeopardy.
- A foreclosure
is the one credit report item that is almost impossible to be "repaired".
- Foreclosure will remain as public record on a person's credit history for 10 years or more.
Consider during
a Short Sale!
Time is of essence! The minute you
realize that you can no longer afford your mortgage payments take action! The longer you wait, the less likely your
lender will even be willing to discuss a short sale.
Remember-
your lender has to approve your short sale! You can't simply not want to pay anymore. There must be an acceptable reason why
you can no longer afford to pay your mortgage (i.e. lost of job, divorce, accident, etc) that your lender must
be made aware of.
Each lender
uses a certain criteria and procedures to approve a Short Sale. Contact us so that we can work with you in this process.
Advantages of a Short Sale:
- A short sale can save you from foreclosure
- A homeowner who successfully completes a Short sale will be eligible
for a Fannie Mae backed mortgage after only 2 years
- On
your credit score- only late payments on your mortgage will show and after sale mortgage will be reported as paid or negotiated.
This may only lower your score as little as 50 points if all other payments are being made.
- A short sale's affect can be as remedied as little as
12 to 18 months
- A short sale is not reported on your credit
history- so you don't have to worry about challenge to your employment
- A
short sale on its own does not challenge most security clearances
- In
some successful short sales it is possible to convince the lender to give up their right to pursuit a deficiency judgement
against the homeowner
Don't Wait! Get the facts, know your
options, and take action!
Call
us- We are experienced and have a successful track record. Let's talk!
Fannie Mae "KnowYourOptions.com": offers information
for borrowers with Fannie Mae loans.
Updated Information:
NO
MORE STATE TAX ON FORGIVEN DEBT
"Qualified
principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving
a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the
extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians
who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental
property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from
debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their
current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
Beware of Loan Modification
Scams: Loan modification scams are on the rise, but HUD is taking action to put these con artists out of
business. Preventloanscams.org was recently launched by the federal agency in partnership with a national coalition of public
and private enterprises. The new system allows for better analysis of fraud trends across jurisdictional lines, which HUD
says will likely lead to an increase in private enforcement action filings.
