Every week I go to my county foreclosure auction to check on what is selling; and mostly what is not. The banks are not dropping prices on foreclosure properties. It is always a mystery to me why so many distressed homeowners let their property go to foreclosure. I routinely mail advertising offers to negotiate their short sale. I’m sure these same distressed homeowners are deluged with foreclosure avoidance offers. But it’s obvious that the huge majority of these homeowners did nothing to avoid the foreclosure.
I can tell by checking the local Multiple listing Service that they did nothing. The huge majority of didtressed properties are REO, or Real Estate Owned. Very few are short sale offers. This is an incredible mystery.
Linked below is one more article that clearly explains why a distressed mortgage owner should pursue a short sale. I have seen the benefits of an investor-negotiated short sale. The opportunity to avoid almost every negative of a distressed property sale is huge. Again, foreclosure is the worst option.
“Losing your home to foreclosure has many severe consequences. First, anytime the bank forgives debt greater than $600, they have to report it to the IRS. For example, if the homeowner owed $200k for the house but it sold at auction for $120k, the $80k difference would be forgiven. Since this $80k is forgiven, the former homeowner is not going to pay the expenses for it. Since they don’t pay the expenses, the IRS considers this ‘forgiveness’ to be income, and the former homeowner may have to pay income taxes for that $80k. Not only has this person lost their house, but now the IRS will be going after them for tax payments.”
Getting an experienced short sale negotiator can help avoid all of these consequences. Through 2012, deficiencies will not be taxed by the IRS.
“Second, the bank may still choose to sue you for deficiencies of the loan. Using the example above, the bank may want the former homeowner to pay the difference between what the home was sold for and the amount owed. Not only has this person lost their house, but now the homeowner may have to make payments to the bank for the remaining $80k of a house they are not even living in.”
An experienced will negotiate the deficiency away, based on your hardship.
That same investor/negotiator can negotiate a low enough selling price that you won’t have to sit through months and months for serious offers. People looking to buy the property will know that the investor cash offer is much easier to close on. That will make your distressed property even more attractive.
“Finally, the credit damage on a foreclosure is quite painful. A foreclosure is considered by many lenders to be the worst possible event to happen to an individuals’ credit score (even worse than a bankruptcy). A credit score can drop up to 200 points with a foreclosure. But to make matters worse, it takes 10 years to remove a foreclosure from your credit score. Also, a low credit score can affect other items, such as your credit card rates as well as your car insurance rates. In many circumstances, having a foreclosure on your record can prevent you from getting certain types of jobs. Not only has this person lost their house, but their credit will be damaged for a decade and are eligible for fewer jobs because of this personal catastrophe.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. Obviously this page concerns short sale, short sale rules, and foreclosure alternatives. But other concerns such as try title, quiet title, and clear title may apply. The REST Report is best classified as loan modification software or do it yourself loan modification. But if your reduced income is too low, short sale versus foreclosure is the goal. The REST Report claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using their software. It is the answer for a real estate title search to decide if your mortgage servicer has the right to foreclose on you at all. This blog is dedicated to independant mortgage advice. If you have assignment of title issues or need to calculate net present value, you may have a cloud on your title which can block the short sale rules. This blog is a resource to evaluate short sale vs. foreclosure. There is no excuse for foreclosure other than the treachery of your mortgage servicer.
This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.
Read it here
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Originally posted 2010-08-04 07:50:33. Republished by Blog Post Promoter
{ 3 comments… read them below or add one }
This does not excite me but this is what the IRS has to say.
The tax statutes were re-codified by an Act of Congress on February 10, 1939 as the “Internal Revenue Code” (later known as the “Internal Revenue Code of 1939″). The 1939 Code was published as volume 53, Part I, of the United States Statutes at Large and as title 26 of the United States Code. Subsequent permanent tax laws enacted by the United States Congress updated and amended the 1939 Code.
ALL taxes are theft. The government will continue to take more money from the rich AND middle class as long as we are okay with the idea of services provided at the barrel of a gun. Propaganda is the only thing propping up the idea of government.
Then set up offshore bank accounts.
If you set this up correctly you will have little or no tax liability. If you want to eliminate taxes, start your business with an offshore corp and Foundation.
– Stacey Edwards
Short Sale better than Bankruptcy – which is better than foreclosure – http://t.co/Vu9cWTF9