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Short sale specialist?


luna
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I need to know the best way to go about trying to find a Short Sale Specialist. After no luck of trying to sell my house for 10 months with a realtor before my ARM adjusted -- I'm hoping that this will work for me before the next hike in a few months. I'm in SE Michigan and any advice is MUCH appreciated!

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One suggestion would be to visit a knowledgeable Loan officer as there are some programs becoming available that may lower your rate to where you can afford your home.

There are (I remember seeing one, but can not figure out at this time how I found him) some companies set up to buy your home and lease it back to you with an option to buy it back. That situation might work for you as you could just move out when the option came up.

Short sales have several negatives, one of them being that you can get hit with a bill from the IRS for the difference between what you owe and what the lender gets from you.

Charles

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I spoke to a borrower yesterday in New York about a short sale.

A Short Sale or mortgage loan discount, cost thousands of dollars less than a full foreclosure. Banks are willing to do so because they often lose less on these deals than they do in foreclosures.

Are you behind on the payments? You should talk with your banks customer service. You could discuss a possible loan modification to help lower the payments.

In a modification, the servicer actually adjusts the terms of the loan to make it affordable. It may lengthen the amortization schedule or lower the interest rate to cut the monthly payments, or roll the past due amount into the loan and re-amortize the new balance so the borrower can pay the additional debt back over time.

2TA -..:)

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One suggestion would be to visit a knowledgeable Loan officer as there are some programs becoming available that may lower your rate to where you can afford your home.

Charles

Find and speak to an FHA approved Broker immediately. FHA link for HUD approved brokers here:http://locator.fha.gov/cgi-bin/answers_hud_loc.cfg/php/loc/enduser/loc.php

There is a program called FHA secure, that can allow you to refinance even if A. You owe up to 15% more than your home is worth,

B. Your credit score is below 550 and

C. You are up to 90 days late on your mortgage. It's the face of the gov'mnt bailout.

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BigJohn

A "short sale" is when a third party, with the homeowner's permission, makes a direct offer to a bank to purchase the property for less than the homeowner owes. Usually as part of the offer the third party askes the bank not to take "recourse" on the homeowner for the remaining portion of the loan, nor to report anything other than paid to the CRA's.

Depending on the bank there may be tax issues involving the remainder that the homeowner will have to deal with.

Whether a bank accepts or not is usually directly related to the loss mitigation officer for the bank. Right now odds are pretty good that the bank will accept any decent offer. As a bank officer explained to me once, "When a bank takes over a home that was forclosed on and did not sale at auction. It is just like moving the man you caught cheating with your wife into the bedroom down the hall. Everyone is uncomfortable and has a bad taste in their mouth."

Here is a decent article on the subject: http://biz.yahoo.com/brn/070918/23151.html?.v=1

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BigJohn

A "short sale" is when a third party, with the homeowner's permission, makes a direct offer to a bank to purchase the property for less than the homeowner owes. Usually as part of the offer the third party askes the bank not to take "recourse" on the homeowner for the remaining portion of the loan, nor to report anything other than paid to the CRA's.

Depending on the bank there may be tax issues involving the remainder that the homeowner will have to deal with.

Whether a bank accepts or not is usually directly related to the loss mitigation officer for the bank. Right now odds are pretty good that the bank will accept any decent offer. As a bank officer explained to me once, "When a bank takes over a home that was forclosed on and did not sale at auction. It is just like moving the man you caught cheating with your wife into the bedroom down the hall. Everyone is uncomfortable and has a bad taste in their mouth."

Here is a decent article on the subject: http://biz.yahoo.com/brn/070918/23151.html?.v=1

Well Said Rick......:)

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Short sales have several negatives, one of them being that you can get hit with a bill from the IRS for the difference between what you owe and what the lender gets from you.
I think I recall that section 108 Cancellation of Debt (COD) Income can be reduced to the extent of insolvency. This can happen inside a BK or outside. So if you can show the IRS that your liabilities exceed your assets even without filing a BK, then you can escape income tax.

Example:

1) Receive COD 1099 for $20000 of income.

2) Can show the IRS that your liabilities exceed your assets by $12000.

3) Need to report $8000 of COD income.

I think the other $12000 is either forgiven or is buried in an asset basis reduction. This is an important distinction. In either case, a long term tax deferral or a forgiveness is much better than an upfront bill.

If you have to go down the short sale road and you think this applies, see a tax consultant. You may save yourself thousands.

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Well I'm not behind on my payments at this time which is good news. I'm accrued more debt than I"d like but I've been able to juggle the house pay. What my big worry is that if things don't change -- within a year or so I'll be in dire straits. I"m trying to make some tough (and seemingly impossible decisions) while I still have some choice in the matter.

I bought this home in a decent working class neighborhood but its not good anymore. Most of the houses on my street are vacant whether abandoned, in foreclosure or - unable to sell - alot of homeowners are renting to anyone with a pulse. So its a decent neighborhood gone bad. I'd love to get out but my options are limited.

Sure I could probably get on the govt bail-out -- refi my loan and stay put. But the area isn't so hot these days. If I loved this house I'd fight to stay...I just don't think its worth fighting KWIM?

Not sure how to find a company to buy my house and then lease it back to me but that sounds like a favorable if not a feasible option.

I just don't think selling it to another buyer at this point is even possible. I'm guessing even less houses will be selling in the next year or so then before -- which was pretty slim pickings. I'm just sick and losing sleep about this mess. I know there's an answer and I'm like a dog picking at a bone til I can figure it out!

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Something else to consider on the forgiven debt. As explained to me, if you have lived in the house for 2 or more years the forgiven debt is considered part of the price you received for the house and has no tax liability. Once again consult a tax expert.

As to finding someone to buy the home and lease it back to you. The odds of that now happening are probably very slim. The current buzz in the short sale/Sub2 markets surrounds a couple of real estate investors being sued over this practice.

Seems a homeowner was one step away from the auction when he reached a agreement to short sale the home to a real estate investor and then leased it back from the investor. A year goes by and the homeowner falls behind in payments again and the investor files to evict him. The homeowner sues the investor for usiery(??? spelling). Basically using the homeowners situation to force a Loanshark type agreement onto the homeowner by "loaning" him the money to save his house. The homeowner wins and gets to keep the house free and clear. Of course a couple of other people doing business with the real estate investor hear about the case and they sue for their "rights" also.

Now with a couple of these cases going on in the court house the local District Attorney starts hearing the word guarnteed to make his knees all weak. RACKETEERING. Now the Investor is in criminal court and that is the end of the story so far.

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I could so see that happening. Like I said -- favorable but probably not feasible. Someone to buy your house from you sounds too good to be true. And I'm certain at this rate that they have their pick of any house on the block. The market is flooded.

All I could try is to find a Short Sale but just like trying to sell any house -- the buyers just aren't there. Good price or not the crowd buying isn't very big. And with the crunch on bad mortgages I'm guessing making it harder to buy a house makes even less buyers.

There just doens't seem to be any options for homeowners in a bad spot these days.

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