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Short Sale: a win for you can be a win for the bank...
What happens to the second loan?
If the second loan was part of the original purchase of the house, this loan is cleared by a Short Sale without any recourse by the lender (This is referred to as a "Purchase Money Loan").
If the second loan was refinanced; either a Line of Credit (HELOC) or "cash out", then the agent will negotiate with the lender to settle these loans. The goal is to have this loan satisfied by the short sale and a Deficiency Judgment or a collection agency will be avoided at a future date.
Will I pay for this service?
No, a Short Sale is just like any other real estate transaction: all costs, fees and commissions are paid by the buyer and the bank.
Are there any other options to a Short Sale?
Yes, you may qualify for a Deed in Lieu of Foreclosure from the lender. If you can't find a buyer the bank will accept during the Short Sale, many lenders will accept this method to avoid foreclosure. This will typical impact your ability to finance another home for 4 years - a Short Sale must be done first.
Please
call my team at 714 658-5739,
anewstartoc@gmail.com
- I can sell your house
in seven days and stop the auction, even if you have less
than 4 weeks until the sale - call for details.
How long does the process take?
The earlier you start the process the better. Contact a Realtor when you have made the decision you can no longer afford your mortgage payments.
I Received a Notice of Default from the lender, can I still use a Short Sale?
Yes, in California you have 111 days before the auction date.
How soon can I can I buy another home?
Current policy: Freddie Mac, Fannie Mae and the FHA will finance a new home for Short Sale homeowners after 24 months. Most home mortgages are financed by these government supported agencies today. A foreclosure will adversely impact your ability to finance a home for up to 7 seven years.
Will I pay income taxes because of a Short Sale?
A temporary law was passed last year to help taxpayers avoid income taxes on loan forgiveness: expires in 2012. There are rules to qualify: IRS Short Sale Tax Impact 1099 Form, ask your tax preparer/CPA to see if you qualify: IRS Description: The Mortgage Forgiveness Debt Relief Act and Debt Cancellation.
Wikipedia: Mortgage Forgiveness Debt Relief Act of 2007