Short Sales

Short Sales Vs Foreclosures Vs Traditional sales

We need to understand that while the current economy is really a “Tale Of Two Cities” in that some people have no idea we are in a recession whereas others are in deep pain, the real estate market as a whole is being impacted by distressed properties. Based on the current backlog of homes, it may be this way for some time. That being said, why are short sales being embraced by everyone as the most economical way to move markets forward? When you look at a comparison of the loss incurred by the lender, you will see that losses are generally worse with a foreclosure. Larger losses via lower sales prices ultimately impacts everyone who is buying, selling or refinancing. I have a report and flyer I’d like to share. Both provide you with opinions and resources so you can draw your own conclusions. Solving the housing problem starts with understanding the problem as well as exploring viable solutions.

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Short Sales

No Gain or Loss Needs to Be Recognized in Securities Loan Transaction for Short Sales

The Tax Court recently reiterated its position with respect to non-recognition of the loan of securities by one to another person, such as a broker or investor engaging in a short sale. The Tax Court rules that such a loan does not constitute a “sale” for which capital gains would otherwise be realized. The Court set forth the terms of the loan agreement that must be agreed to by the parties under Section 1058(b), including (1) the return to the owner of identical securities that were transferred to the borrower, (2) payments must be made to the owner of the shares equal to all interest, dividends and other distributions which the owner of the securities would otherwise be entitled to receive, if any, during the loan period, (3) the owner’s risk of loss or opportunity for gain remains the same, and (4) the agreement complies with all requirements under the Tax Regulations. See Henry Samueli et al v. C.I.R., 132 T.C. No. 4 (2011).

Under the proposed regulations, the payments compensating the owner of the securities for interest, dividends and any other distributions are treated as “a fee for the temporary use of property” and not as interest or dividend income, except for those instances where the borrower defaults under the loan agreement or fails to deliver any consideration to the lender of the securities. In these limited circumstances, gain or loss must be recognized by the lender at the time of the borrower’s default.

This article was written by a friend of mine, Steve Katkov. Steve Katkov is Senior Vice President and General Counsel for Commercial Partners Exchange Company (CPEC), a national qualified intermediary facilitating tax-deferred exchanges of both real and personal property pursuant to Section 1031 of the Internal Revenue Code. He has been involved in thousands of 1031 exchanges of real and personal property, including complex reverse and improvement exchanges. His client list includes Fortune 100® companies and some of the nation’s largest privately held corporations. Prior to joining CPEC, Steve served for more than six years as a Vice President/Regional Manager for First American Exchange Co. (a subsidiary of First American Title Ins. Co.).

Steve Katkov, SVP (612) 419-6118
Commercial Partners Exchange Co.
1300 U.S. Bank Plaza
220 South Sixth Street
Minneapolis, MN 55402

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Short Sales

Short Sales, Foreclosures, Bankruptcies, Judgements All in one Transaction

I just had a short sale blow up because of undisclosed tax liens and judgements. The title couldn’t be cleared and we ended up with a mess. Everyone involved has to dismantle and start over again. I couldn’t help but be disappointed. But, in today’s real estate world this is common. It is all about attitude. When life throws you lemons, learn to make lemonade. Yes, it is more complicated than that. Take a look at this video and share it with someone who may have had a set back. It is really powerful and inspirational

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Short Sales

Projected Loss Severity Of A Foreclosure-both 2010 & 2011

Short sales are probably going to be the loss mitigation method of choice.  When you look at the loss severity of a foreclosure, you can see why some other method might be preferable.  Look at the Fitch ratings report here and see for yourself.  This may be useful information when negotiating with the banks and servicer.

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Short Sales

Short Sales Are Today’s Investor Opportunity

Short sales can be win win transactions for everyone. Take a look at the video and give me a call to get started.

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Short Sales

Short Sale Tips for Buyers

By Robin Husney

If you are in the market to purchase a home, you may want to consider buying a short sale. If you are not under any pressure to sell your current home, don’t have a time frame to move into another home and have good credit, you are the perfect homebuyer for short sales.

When a homeowner owes more money than their home is worth and needs to sell their home before succumbing to a foreclosure or because of a job change, the home can be sold through a short sale. This benefits the lender because they won’t have to go through the time, effort and money to put the home through the foreclosure process and it helps the homebuyer out because they are then able to put their home up for sale. This can only be done when the lender agrees to allow the home to be sold for less than is owed on the mortgage.

- Don’t let the name fool you. Short sales are typically anything but “short”. They can take several months to finalize. Because of that, you may want to continue looking at other homes while the short sale process is underway.

- While the buyer and seller determine the sale price, the bank makes the final decision on whether the price is acceptable or not. So, even if you and the seller agree on a price, the bank can come back and say “no”.

- Submit a realistic offer. Unlike traditional sales, submitting a low offer is not recommended. You can pretty much expect that a bank will reject a low offer right away. In fact, even a reasonable offer may not be accepted right away. By submitting an offer for what you legitimately want to pay for a home is the best thing to do on a short sale.

- Check out the neighborhood comps. Your REALTOR® can help you with this. You will be able to submit an appropriate offer if you know what other homes in the area are selling for.

- Homes are sold “as is”. While banks need to repair and clean up homes they are selling in foreclosure, a short sale isn’t held to those same rules.

- Banks make the rules. It’s up to the bank as to what they will accept as a downpayment, whether an offer is good enough for them, etc. There are no “rules” set in place for short sales. It really is up to the bank’s discretion.

It’s always a good idea to hire a specialist to help you with your short sale needs. They will work on your behalf to make sure that things run as smoothly as possible.

Robin Husney
Allen Tate Realtors
Charlotte, NC
704-517-6370 * http://www.robinhusney.com

Article Source: http://EzineArticles.com/?expert=Robin_Husney
http://EzineArticles.com/?Short-Sale-Tips-for-Buyers&id=4926498

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Short Sales

HAFA Is Here & NOW- Additional Assistance On Getting Short Sales Completed

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Short Sales

The Short Sale As An Option To Avoid Foreclosure

With the housing market in the worst slump that it has seen in years, and fewer and fewer buyers out there, you may find that you are in a position where you are unable to make your payments.  With foreclosure looming large, and so many people who have already fallen prey to it, it is easy to feel as though you have no options available to you, but the truth is just the opposite.  When you are in a place where you are going to lose your home, you will find that there are things that you can do to soften the blow.  One of the best things that you can do for yourself when you are in a place where you are facing foreclosure, looking into a short sale might be one of the most important things that you can do.

To really understand what a short sale can do for you, you need to understand what a foreclosure is and what is happening to your property.  A foreclosure is essentially the process where a lender goes through legal channels and terminates your right of redemption.  In many cases, this can only happen when a payment has been missed, though the payment missed may not even be a mortgage payment. Other payments that may be missed include local taxes and even home owner’s association fees.  In some states, you may be given a chance to make the payment, but if the payment cannot be made, the home will usually go to auction.

Along with the issue of losing your home, you will also find that going through the process of foreclosure is one that can have severe consequences for you.  For instance, you will find that going through a foreclosure will cut your credit by 300 points, which is the heaviest hit that your credit can take!  In addition to this, this is a fact that you will need to disclose in future mortgage applications and even in some job applications.  Furthermore, you will also find that you will be ineligible for any government insured loan for between five and seven years.  This is something that can make a great deal of difference to any plans that you have for your future.

When you think about all of these consequences, you will find that one of the solutions that presents itself is a short sale.  At the most basic level, a short sale is a situation where the lender will agree to accept less money than the amount that is owed against the home, for the most part because there insufficient equity that would result from selling and paying the costs of the sale.  In most cases, you will find that a lender is only willing to negotiate for a short sale when there has been financial hardship that has prevented you from paying and monthly shortfalls that come out to being a financial handicap towards paying.  You should also keep in mind that when you try to negotiate a short sale that you should not have liquid assets that can be tapped for repayment.

With all of that in mind, what advantages does a short sale give?  After all, you will still be losing your home, and your credit rating will still dip.  The truth of the matter is that a short sale may very well be the best way out of a bad situation. The first advantage, which can be the one that makes all the difference, is the fact that a short sale can make you eligible for a home sale much sooner.  You may find that you will be able to get a new home again in as little as two years.  You will also find that when you have a short sale on your records, as opposed to a foreclosure, that you will be able to qualify for a government insured loan again in roughly two years.

Second, you will find that while it is true that your credit will suffer from having a short sale on your record, it will also be easier to recover in the long run.  When you have a short sale, you will risk having your credit slashed by two hundred to three hundred points.  This is just as bad as having a foreclosure, but what you may not realize is that you can recover from this set back a lot easier.  In fact, many people manage to recover from having a short sale simply by keeping one or two credit cards and keeping them current.

Take some time to consider how best to proceed with a short sale.  For example, you will find that the sooner you get proceedings for one under way, the more likely it is that you are going to be able to get your lender to see things your way and allow the short sale.  Remember that the lending institution is not under an obligation to allow a short sale, and in many ways, this is something that can be quite difficult for them to work with.  Make sure that you apply for one before you miss a payment.  Look ahead at your finances and make sure that you consider what your options are going to be and what you can do to make the best out of what can be a very bad situation.

Many people look into the aid of a trained short sale negotiator to help them.  Having a professional on your side can be a huge advantage, and at the end of the day, this can make all the difference.

Take some time to really consider what your options are going to be.  You already know that you do not want to go into a foreclosure, but what can you do to make sure that you are going to be getting the results that you need?  Consider a short sale and see where this significantly more forgiving option can take you.

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Short Sales

Looking at Short Sales and Understanding Your Options

With the economy in the shape that it is in and with foreclosures happening left and right, you need to be in a position where you know what is going on with your finances and what it might be doing to your ability to pay your mortgage.  A foreclosure is very close to being a homeowner’s worst nightmare, but even when losing your house is inevitable, you will find that there are choices that you can make that will cushion the fall.  Consider what your options are going to be and really take some time to research what your choices are.  Foreclosure is not necessarily the only choice that you have, and by making sure that you are educated on the subject, you will find that it is much easier to get the results that will see you towards recovery sooner.

In the first place, consider what your options are when it comes to a short sale.  Essentially, when you do a short sale, you are selling your home for the remainder of the amount of the mortgage.  It can be quite hard to get the lender to agree to this sort of loan because they will often end up losing money on it.   Do not assume that this is a possibility unless you have been talking with your lender and being open and clear on the communication that is going back and forth between you.  Take some time and really consider how your relationship with your lender is, and remember that the earlier you initiate proceedings, the easier it will be to get this kind of loan.  Essentially, you are asking the bank or lending institution to take a lower pay off.

While doing this can stop the foreclosure, keep in mind that it is not an ideal situation.  You will discover that you will still end up losing your home and your credit score will still sink around three hundred points.  On the other hand, you will be able to qualify for a government secured loan much more quickly than you would have been if you were dealing with a foreclosure and you will be able to maintain a great deal more control over the procedure.  The decision to go ahead with a short sale is something that many people have to think about, but if you want a mortgage foreclosure canceled, this may be just what you need to do.

A short sale is something that may be discussed when you are dealing with an upside down loan.  With an upside down loan, you will find yourself in the awful position of owing more on a property than it is properly worth. Though it seems counter-intuitive, you’ll find that there are a number of ways that this might happen.  The most common way that people find themselves in upside down loans today is due to the faltering housing market.  More and more people are realizing that they have loans on houses that would sell for a great deal less money than when they bought them.  If you find yourself in this situation, a short sale might be your only option when it comes to getting a mortgage foreclosure canceled.

Remember that there are many qualifications that need to met before you can get a short sale.  The first and best thing that you can do to make sure that you have a better chance of getting one is to talk with your lender right away.  As soon as you are sure that you are going to be missing a payment, call your lender to talk about the options that you have.  Remember that when you are dealing with the lender that you are essentially asking them to take a loss.  You may need to pitch it in such a way as to tell them that the loss that they are going to be taking this way is still less than the loss that they would be taking otherwise.  It is not a pleasant conversation to have, but in many ways, it is a necessary one.

Be aware that when you are applying for the possibility of a short loan that you need to consider being able to write a hardship letter.  Essentially, a hardship letter presents your situation to them in a blunt and straightforward and lets them know a little bit about what you are gong through. It should be honest and it should tell them all the details that they need.  You are using this letter to let them know that the situation that you have encountered is beyond your control.  Things that may be included may be the loss of a job, a death the family, or an illness that has caused problems in your life.  When writing this letter, make sure that you do not fall into the trap of complaining about the company that has loaned you the money or how they have made your situation worse.

If you are looking into applying for a short loan, you may also find that it would work in your favor to get to get a third party on your side.  To this end, you may wish to consult with a representative of the Homeowners Preservation Foundation or HOPE NOW, which are two non-profit agencies that can give you the counseling that you need to get you through this difficult time.  They may be able to provide you with advice that you were not aware or resources that you did not know were available.

Consider what your options and make sure that you do not fall into the trap of thinking that you have no choice at all.

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