…get started on a short sale now.
When payments are overdue it can be tempting to simply wait it out and live payment-free for a few months until the bank gets around to foreclosing. However, that's a poor idea in terms of your financial future.
Three very good reasons to avoid foreclosure and take steps toward a short sale today:
1. Credit, and your ability to purchase another home
A foreclosure will stay on your credit report for ten long years. And even if everything else on your report is good, and you're able to raise your credit scores, you won't be eligible for a new mortgage loan for 5 to 7 years.
After a short sale, you'll be able to purchase another home in as little as 2 or 3 years.
2. Your financial liability for a deficiency after a foreclosure
If you happen to have a second mortgage or a home equity line of credit, the second lien holder can and probably will sue you...
What buyers and sellers need to know about Los Angeles short sales
If you live in Los Angeles, you probably have friends or acquaintances who have recently sold their homes in Silver Lake, Los Feliz, Echo Park, Eagle Rock, and surrounding neighborhoods.
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Those who purchased after prices began to skyrocket in 2003 probably found it necessary to sell through a short sale. This is the process by which the bank agrees to accept less than the balance due on the mortgage so that a homeowner can sell at fair market value.Prior to 2011, the banks could then sue the sellers for a "deficiency" to collect some or all of the shortage. Fortunately for California homeowners, Senate Bills... |
You've no doubt heard horror stories about Los Angeles short sales that took months to close – or that went into foreclosure before the short sale was approved.
Those stories are true,
but preventable, because the primary cause of extreme delay is failure to submit a complete and correct short sale package.
We won't pretend that a correct package will make your Los Angeles short sale close as fast as a normal sale. Under the best of circumstances, the banks are slow about communicating and giving approval. But submitting an incorrect package sends your short sale to the bottom of the stack.
Once you've made the decision...
| Once you've examined your other options and determined that a short sale is the best course of action for you, contact your lender and ask for their short sale package.They'll send you paperwork to fill out and a list of documents you must provide. Your agent can do this for you, if you wish. Since that... |
When Congress passed the Mortgage Tax Debt Relief Act in January of 2008 they created a "tax safety net" for underwater homeowners who were either foreclosed upon or who sold their homes as short sales.
This act removed the tax consequences of having mortgage debt "forgiven" either through foreclosure or a short sale. Until then, any debt that a mortgage holder wrote off was subject to Federal Tax as "1099 Income." The act provided a tremendous relief to home sellers in Los Angeles when their home values took such a dramatic tumble.
Without it, underwater homeowners in
Silver Lake,
...
