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40 Year Mortgage Foreclosure Article
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Learning About Foreclosure & Short Sale
from:Foreclosure on a home is a devastating process for the homeowner. They often feel that all their life-long dreams of home ownership are going down the drain. For whatever reason, they are no longer able to make the payments on their home so the home is in foreclosure. When a home is in foreclosure, the lender is selling the home at public auction where the highest bidder gets the home. Sometimes as an alternative to the actual foreclosure, short sale may take place.
A foreclosure short sale may take place if the lender agrees to sell the home for less than what is owed to the bank. The bank accepts a discounted payoff and releases the mortgage. However, many times the bank will list the home as a foreclosure short sale, but they may not accept the offer given by the new buyer. A home may not actually be in foreclosure for a lender to offer a short sale. If the value of the home has fallen way below what is owed on the mortgage, the lender may consider a short sale as an attempt to bring the price of the home in line with market value.
Although to avoid a foreclosure, short sales are often accepted, there are circumstances where the lender may not want to accept a short sale. In some circumstances, the lender will come out ahead if they go through with the foreclosure. This may be the case when the value of the home is much higher than what is owed on the mortgage. In a situation such as this, the lender may be able to sell the home for less than it's worth but still be over what is owed on the mortgage.
If you are a buyer looking for a cheap home to buy, be aware of the negatives involved in a pre-foreclosure short sale. You may see a home on the market that seems to be too good to be true. Check with a real estate agency to see if the home is a short sale. The lender may not accept your offer and short sales are seldom simple to complete, often taking months to complete.
A foreclosure short sale may seem like the answer to the homeowner facing the loss of their home. They will have the opportunity to be out of debt, but there are also consequences to a short sale. The largest consequence is the tax liability that may fall on the seller (homeowner). The lender has to notify the IRS of any taxable sales and they may give you a 1099 for the amount they were shorted. Although the Mortgage Forgiveness Debt Relief Act of 2007 forgives many debts in foreclosures, some of the dollar amounts are exempt from this act.
Before you get too excited about a short sale, contact a lawyer to find out your possible tax liability. Another negative about a pre-foreclosure short sale is what it does to your credit rating. It will show up even more negatively on your credit report than a foreclosure. So consider all options when your home is facing foreclosure.
40 Year Mortgage Foreclosure News
Nearly 40% of Mortgage Settlement Cash Diverted By States - Mortgage Rates & Trends (blog)
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Hitting rock bottom: Housing crash spawns dirt cheap sales - STLtoday.com
Hitting rock bottom: Housing crash spawns dirt cheap sales STLtoday.com "Sometimes they sell something on the courthouse steps and you say, 'You're kidding me. You'll take 40 cents on the dollar on that?'" Many foreclosed homes end up in the hands of Fannie Mae, the mortgage giant that fell under government control in the ... |
Foreclosed Americans find way back to homeownership - Reuters
Foreclosed Americans find way back to homeownership Reuters By Jilian Mincer | NEW YORK (Reuters) - When Jennifer Anderson's family could no longer afford their mortgage and lost their home, she expected many years to pass before they would again become property owners. But less than two years later, in March, ... |
US April new-home sales inch up; mortgage rates hit historic low - Medill Reports: Chicago
 Medill Reports: Chicago | US April new-home sales inch up; mortgage rates hit historic low Medill Reports: Chicago “It started on a path towards stability with growth coming next year,” Tashjian added. However, Ivan Choi, a senior vice president at Matt Martin Real Estate Management LLC in Austin, Texas, expressed a conservative perspective. |
Delinquent taxes land homes in Worcester County auction - Delmarva Now
Delinquent taxes land homes in Worcester County auction Delmarva Now SNOW HILL -- The number of homes going to tax lien auction in Worcester County has more than quadrupled in the last two years. County finance officials today will hold a tax lien auction, in which the lien rights to 125-140 properties countywide will ... |