The Tall Short Sale Guy

 Helpful Links

  The Mortgage Forgiveness Debt Relief Act of 2007 

The HAFA Program released April 5, 2010

What Does the Bible say about dealing with stress?

Past Short Sale Testimonials and More Information

 In today's rapidly changing economy, home owners are faced with new challenges everyday just trying to hold on to their jobs, keep their bills current and of course avoid losing their homes and destroying their credit that will effect them for many years to come.  Although markets do seem to repeat themselves as history has show us and do occur in cycles, nobody is for certain just when things do plan on turning themselves around.  When faced with difficult challenges financially, it tends to effect us spiritually, mentally and emotionally all which can result in negative side effects that affect no only you, but your family, friends and loved ones.  Knowing where to turn for guidance and help through these times is certainly crucial and by facing our challenges head on instead of avoiding them; it not only makes us stronger and more wise; it will improve the lives of those around you that care about you and depend on you as well.  In fact, it also can improve the lives of your neighbors and surrounding communities.  

Lately we have been successfully negotiating and working more and more short sales for those that are truly in need of them, however we also know that many of you have been inquiring about short sale possibilities on your own homes and it is apparent that there is alot of confusion out there regarding short sales.

If I would sum all of this up, even to agents out there I would say that the process of consulting homeowners and sucessfully negotiating short sales is purely an art form and not a science!  Each homeowner and their situation is unique as well as each bank’s own policies and procedures are different and unique so there is no universal system that can break all of this down, but there are certainly ways to help minimize the confusion and erroneous beliefs.

You the seller are faced with a tough position, first you must understand what your rights and know what options are available to you.

1. Refiance (If current, take advantage of current low rates to decrease mo. pmt)
2. Sell and Bring Cash to closing (Liquid assets brought to bring up balance due)
3. Lender Workout (Loan modification, Forbearance, Reinstatements, Repayments)
4. Short Sale (Bank will accept a pay off less than owed to avoid foreclosure)
5. Investor Exchange (Lease Options, wraps and qualifying and un-qualifying assumptions)
6. Bankruptcy (If you desire to stay in the house, contact legal counsel for protection)
7. Deed in lieu of foreclosure (just trade over property to lender to cancel out the note)
8. Foreclosure (Bank takes over possession and attempts sale on courthouse steps)
9. Walk-away and Do Nothing

So many times I have agents come to me and tell me that their client would like to pursue a short sale because they don’t have any equity in the house and are being relocated.  Unless they are also not making their monthly payments (either full or short pays) at that time they would probably not qualify for a short sale.  There MUST be a qualifying hardship present which includes but not certainly limited to:

• Job Loss
• Business Failure
• Illness and Medical Costs
• Divorce or death of spouse
• Natural Disasters

A bank will not desire to perform or be in need of loss mitigation unless they do have a note that is “non-performing” or delinquent.  Of course, a Realtor can never advise you to actually “fall-behind” on your mortgage to qualify, but if you do have recourse concerns or questions; it’s always advised to seek advice from a finance, tax and legal professional.  The U.S. Foreclosure Network can be a possible source to locate attorneys who specialize in bankruptcy and foreclosure that may help on little or no fees.

There are some other major requirements that would qualify a seller for a short sale such as sufficient time left before foreclosure date, amounts owed and to the number of liens currently on the property, condition of the property and the willingness of the homeowner to do all that is required of them before and during the process.  More information regarding these and much more is available at www.thetallshortsaleguy.com.

One last soap box comment from me and my opinion is that if you are truly in need of some help and guidance, why on earth just call up some “jo-blow” Realtor or any other real estate agent that has little to no experience in not only short sales, but experience in guiding distressed and desperate sellers to getting the right help?  There is many resources out there for help available and since everyone’s situation is different, we are always happy to offer a free counsultation to you to see if we can help point you in the right direction.

In the meantime, here are some more very helpful links that will be a great benefit to you:

• www.makinghomeaffordable.gov
• www.hud.gov/foreclosure
• www.foreclosurelaws.org
• http://www.nfcc.org/
  

As always, feel free to give us a call for a free consultation.
210-286-4440

SHORT SALES?  NEED ADVICE?  WE'RE HERE TO HELP!

SCR*W SHORT SALES... or.... Short Sales are Screwy?

PROBABLY WONT EVER MAKE IT THERE....

1. Is the short-sale package ready for submission to the lender?
2. Do you have the name, number, fax or e-mail to the negotiator in charge of the file?
3. How many liens are on the property? _- this could be a privacy deal, so the agent may not give you direct answers here.  However, they should at least give you a good idea on how they respond to this to the extent of "do they even know?".
4. Do you have a plan in place to satisfy all lien holders if more than one?
5. Do you truly think, in your opinion, the seller has a hardship that will qualify?
6. What's the average turn-around time you have experienced when dealing w/ said lender? (Offer to Acceptance letter, then to close time)
7. How are you going to handle subsequent offers? (I know that NAR has already addressed this, but sometimes the banks try to supercede our NAR, so you may want to know if that is so)
8. Are you confident in reflecting our offer in the best light to the lender? (Are they capabable of understanding what other factors the lenders may look at when it comes to taking a short sale offer vs. foreclosure)
9. Do you make it a habit to be present when the lender orders the BPO? (This can be HUGE!!)
10. Will you notify us so we can be present at the time of BPO?
11. Do you have ALL documents you need for the short sale package minus a purchase contract, pre-qual and HUD-1?
12. How quickly do you typically hear back from your negotiator? (acceptable avg is around 4 hours to 2 days depending on lender)

You may feel like asking all of these questions will insult the listing agent, but if you politely ask and explain to them that you really would like to work with them; I would hope that they won't take offense to your questions.

In closing, getting your buyers all excited and pumped up about a short sale where you know nothing about the listing agent's abillities is like asking Tiger Woods for marital advice.  NOT RECOMMENDED!

• Make NO Mistake about it.... Short Sales are NOT an EASY ticket out!

  
  So these last 2 weeks to start the year off, wait.. scratch that.. the DECADE off have been very hectic and busy for us.  We are starting to see more leads come in from distressed sellers and "wanna-be" distressed sellers as our short sale business continues to grow.  We've had a handful of questions come in from Realtors and some appointments with sellers that have prompted us to write another quick blog on the subject. 
  
  What are the tax implications if I do a short sale?  Do I have to pay taxes on what I didn't pay to the bank?  Can the IRS make me pay more in taxes if I do a short sale?  Do I have to pay taxes on a short sale?
  
  All of these questions can be summed up from the actual verbage given to us by the IRS in regards to the Mortgage Forgiveness Debt Relief Act and Debt Cancellation.
  
  It will quickly explain in the IRS's given summation on how you or you client can or could possibly qualify to not receive taxable income on the debt they did not pay on a closes short sale.  The one main point I would bring up is, it is ONLY geared towards those short sales on the owner's primary residence.  It also should remain effective from the calander years 2007 to 2012.
  
  Also as a quick "head's up" to any Realtor doing a short sale with your client.  It would be highly advised for you not to EVER give legal counsel or tax counsel on this subject or on the subject of "will I still owe the money on the balance my lender didn't collect?" of course.  It's a no brainer right?  Texas traditionally is a "non-recourse" state however that doesn't mean that deed of trust was written in accordance with a "non-recourse" mentality.  Also I believe here in TX there isn't much out there as far as certain legal language given to us at this point in regards to this, so perhaps you may just want to smack some kind of verbage that gives the seller clear cut instructions to seek legal and tax counsel if they have any questions on those two subjects within the listing agreement. 
  
  If you have a sticky situation and need someone there to get out the adhesive remover, give us a shout; we might be able to help! :)