**Hit the HOME button at the top of the page to see my Categories**
# 10
I can’t make my house payments but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score…is a short sale right for me?
Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder) it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.
# 9
If I pay mortgage insurance and default on my loan, why wouldn’t that cover the deficiency amount?
The mortgage insurance is not there for your protection, just the mortgage lender’s.
# 8
Do I have to have my home ‘Approved’ by the lender prior to offering it for sale as a short sale?
No. Technically speaking there is no such thing as being ‘Short Sale Approved’. The actual approval only happens after you have accepted an offer from a buyer and after the banks review.
# 7
I just missed a payment and I know I will miss more….how long does the foreclosure process take and is there time to do a short sale?
The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In California and in Nevada it’s taking 6+ months. Generally speaking a well priced short sale being processed by a well trained short sale listing agent will sell and close in between 40-90 days, depending on the banks involved.
# 6
Will I still have to pay property taxes or HOA dues if I do a short sale?
Property taxes will always have to be paid as part of any accepted short sale. Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale. Of course, if you’re unable to afford your regular mortgage payment, chances are you are late on your taxes and possibly HOA dues as well. Most banks will start to keep your taxes current. As far as HOA dues, ultimately the banks will pay all or most of your late balance at the time your short sale closes.
# 5
I owe more than my home is worth and I can’t make the payment, do I have to somehow qualify for a short sale?
The simple answer is NO. If someone can’t make their payment and they are otherwise insolvent they qualify for a short sale. Note: insolvent simply means their total debts are greater than their assets. The banks are inundated with foreclosures and short sale requests and are willing to work with you to avoid having a foreclosure on their books.
# 4
Do I have to pay income taxes..I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me..the seller..is this true?
It WAS true, now it’s NO. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due. The home must be your primary residence to qualify under the “Mortgage Forgiveness Act of 2007″.
# 3
How do you, my listing agent get paid..who pays you commission?
The bank will pay the commission along with all the other usual closing costs.
# 2
Do I have to miss a payment to do a Short Sale?
No. Late in 2007 most major lenders started accepting short sale offers from sellers who have never missed a payment. Please call me for more details about this.
# 1
I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then your listing agent will just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holder. I have successfully closed short sales with as many as 3 loans.
Sincerely,
Emily S. Knell
Main Street Realtors
562-430-3053 – emilyknell1@yahoo.com