What is a Short Sale?
A Short Sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed as “payment in full”, in an effort to avoid the foreclosure process. In other words, if the seller meets the lenders criteria, the lender agrees to “write-off” the portion of a mortgage that is higher than the value of a home. Short sales are becoming more and more common in today's Real Estate Market. Short sales can be especially helpful to avoid the negative impacts of foreclosure. The key to short sales for both buyers and sellers is to be represented by a Realtor who is experienced, has the negotiating skills required to deal effectively with financial institutions, and has "lots and lots" of patience. Randy Freed has obtained his Short Sales & Foreclosure Resource Certification from the National Associations of Realtors (NAR) and has represented both buyers and sellers in several successful real estate transactions involving short sales. Because of his well known negotiating skills and his successful record in closing short sales, Randy is frequently asked by fellow Realtors for his advice and support. Other Realtors depend on Randy when they are involved in short sales and are unable to proceedwith the transaction by themselves. If you or someone you know would like more information on the benefits of short sales, please contact me. Thank you,
Randy Freed 805-895-1799 RandyFreed@prusb.com
Helpful Information and Links Regarding Short Sales: 1. Loan Modification: HAMP, Home Affordable Modification Program: This program is designed to allow Lenders to work with homeowners to help them keep their homes by reducing interest rates and/or forgiving back payments. Through this Federal government program, homeowners apply and may be able to take advantage of modifying their existing loan and monthly payments by applying for a new loan through the Home Affordable Refinance, part of the Making Home Affordable Initiative that went into effect in early 2009. The Obama Administration introduced another program called Foreclosure Alternatives, which also is part of the Making Home Affordable Initiative. The Foreclosure Alternatives program allows borrowers who meet the eligibility criteria for Home Affordable Refinance, but don’t qualify for a modification or don’t complete the modification process, to be considered for the Home Affordable Foreclosure Alternative, HAFA.
For more information on the Making Home Affordable Program, please go to: www.MakingHomeAffordable.gov
2. Mortgage Debt Relief and Emergency Economic Stabilization Act of 2008: This act states that money forgiven by a lender in a short sale is not taxable by the Federal Government. In addition, under the Act tax payers are no longer required to pay federal income tax on the forgiven debt, provided that the property is their principal residence. The Mortgage Debt Relief Act only pertains to Federal Income Tax and not State Income Tax. For any questions please consult your tax attorney or CPA.
For further information on the Mortgage Debt Relief and Emergency Economic Stabilization Act of 2008, please go to: www.irs.gov 3. Homebuyer's Tax Credit: For further information on the Homebuyer's Tax Credit, please go to: http://www.car.org/legal/legal-questions-answers/2010-qa/homebuyer-tax-credit-2010/
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