Question-Answer Florida Foreclosure with the Foreclosure Institute
Question-Answer Florida Foreclosure was ask:
Is a Short Sale right for me?
It depends on your situation. Many people decide to do a short sale when that can’t afford their mortgage payment, have already moved out of the house, or experienced a loss in income. Your lender would rather get this resolved now rather than take the property through foreclosure.
Your lender is looking to limit any loss on your loan. Upon completion of a successful short sale, your lender will end up with more money in their pocket than a foreclosure. Bottom line, your lender wants to work with you.
I have two loans. Can I still do a short sale?
Yes. We will work to process a settlement with both lenders. Oftentimes both loans are with the same lender. In this case, it’s almost like negotiating with only one lender. If the first mortgage forecloses on the house the second lender loses everything. That causes them to be much more willing to cooperate. You can still do a short sale even if the sales price is less than what is owed to the first mortgage.
How does a Short Sale affect my credit?
A short sale will negatively affect your credit score, but not nearly as much as a foreclosure or deed-in-lieu. With a short sale, you can buy a house in 2 years versus the 5-7 years you will be forced to wait if you have a foreclosure on your record. A foreclosure or deed-in-lieu affects your credit for a longer period of time.
In addition, many employers are now checking people’s credit before hiring them. Having a foreclosure on your credit will make it tougher to get a job.
What do you charge to help me with a short sale?
We do not charge anything to help you with a short sale. Your lender pays all the costs including title company fees, closing costs, property taxes, and any back taxes or Homeowner’s Association Fees.
Do I need to be behind on my mortgage payments to qualify for a short sale?
No. You can do a short sale and never get behind on your payments. Many lenders request a genuine hardship such as a job loss or job transfer.
How long does a short sale take?
It depends on the lender and other factors. Some short sales are done in 60 days while others take 6 months to finalize.
Will I owe my lender any money for the loss?
The answer depends upon the type of loan you have and the lender you are working with. From our experience, most Fannie Mae and Freddie Mac loans do not pursue you for a deficiency judgment. In addition, in our experience, FHA and VA insured loans do not pursue you for a deficiency judgment. Because laws and loan contracts vary, we will never know for sure until we get your lender’s short sale approval letter.
The short sale approval letter will spell out whether or not the lender can pursue you for a deficiency judgment. In addition, if your lender issues you an 1099 form, they will no longer have the option to pursue you for a deficiency. The law does not allow them to write off the debt, issue you a 1099, and then pursue you for a deficiency. We recommend that you discuss this issue with your counsel.
Will I be responsible for income taxes to be paid on the loss?
Most of the time the answer is no. The Mortgage Forgiveness Debt Relief Act of 2007 made most short sales tax-free. We’ve been asked this question over and over again. So, we did a lot of research on the subject. A summary of all our research is available for you to research yourself. Contact us to receive a free copy of our research. We still recommend that you contact a competent accountant or other tax professionals.
How do I get started on a short sale?
Please contact us to Question-Answer Florida Foreclosure to get started. We will discuss your situation with you and answer any questions you have. You can call us at 1-800-648-0037 ext. 1024 and request a free consultation.
Annett T. Block with Florida Connects specializes in loan modification assistance and short sales in Florida. Florida Loan Modification Help, Florida Short Sales.Florida Short Sale Realtor. Question-Answer Florida Foreclosure