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Home Mortgage Assistance California 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.
Home Mortgage Assistance California Foreclosure News
Preventing foreclosure the focus of seminars - The Desert Sun
Preventing foreclosure the focus of seminars The Desert Sun Those invited to the event were 60 days or more behind on their mortgage payments. Some attendees wanted to learn more about the Obama administration's Making Home Affordable program and the Home Affordable Modification program. While the foreclosure ... |
STATE USES NATL' MORTGAGE SETTLEMENT MONEY TO PLUG BUDGET Attorney General ... - Black Voice News
STATE USES NATL' MORTGAGE SETTLEMENT MONEY TO PLUG BUDGET Attorney General ... Black Voice News But as the placard of a protester staging a rally against home foreclosures outside the Capitol in Sacramento read: “The devil is in the details”. Little did he know, hundreds of millions of dollars meant to provide relief to California's struggling ... |
Below the Fold: Feds Pipe Up and Greedy Governors Screw Homeowners - Huffington Post (blog)
Below the Fold: Feds Pipe Up and Greedy Governors Screw Homeowners Huffington Post (blog) What stands out is that even states slammed by the foreclosure crisis are diverting much or all of their money to the general fund. In California, among the hardest hit states, the governor has proposed using all the money to plug his state's huge ... |
Foreclosure filings up in Philadelphia region - Philadelphia Inquirer
 ABC News | Foreclosure filings up in Philadelphia region Philadelphia Inquirer The bump-up in state and city filings began in the fall, about the same time the last of the federal money used to keep Pennsylvania's Home Emergency Mortgage Assistance Program alive after Gov. Corbett failed to include money in the budget for it. Foreclosures plunge to 5-year low in US recovery Foreclosures Reach Lowest Level Since 2007 |
Mortgage Banking Update - May 24, 2012 - JD Supra (press release)
Mortgage Banking Update - May 24, 2012 JD Supra (press release) The borrowers in Herrera defaulted on a home loan and Federal National Mortgage Association (Fannie Mae) purchased the property at a nonjudicial foreclosure sale. The borrowers filed suit against Fannie Mae to set aside the sale. |