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Raleigh Short Sale Myth: The Mortgage Forgiveness Law Means That Everyone Gets To Short Sale With No Deficiency

May 11, 2012 By

Raleigh NC – I recently heard another so-called short sale expert say that the Federal Mortgage Forgiveness Debt Relief Act made it so that everyone gets to short sale with no deficiency

The unfortunate news is that this is not true. In some state, state law forbids the lenders from attempting to collect from the homeowner after a foreclosure or short sale. But, those states are the exception, not the rule. Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

Here is what the Federal Mortgage Forgiveness Debt Relief Act does. It enables a homeowner to walk away from an upside down debt without owing taxes on the loss.

See, in the past a homeowner that was released from an upside down debt would owe income taxes on the forgiven debt. It is called “Forgiveness of Debt Income.”

This short sale expert said the following: “I read the Mortgage Debt Forgiveness Act and it states that anyone who short sells their house will be released from the debt.”

It is sad that someone who considers themselves a short sale expert would be so misinformed. So make sure you check out everything before you start the short sale process.

The good news is that in most cases a homeowner can short sale and walk away from the debt. But, it doesn’t happen every time. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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Will I Owe A Deficiency On A Raleigh Short Sale If I Have A USDA Loan?

May 7, 2012 By

Raleigh NC – Another common type of loan that does not usually have a deficiency is a USDA loan. The USDA loan program was created to make it easier for people that lived in rural areas to buy their own home.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

USDA stipulates that you must be at least 30 days behind on your payments before they will start the short sale process. This is different from most other loan programs.

I haven’t heard of another loan program where they specifically stipulate that you must be behind on the payments before they will consider a short sale.

The good news is that their short sale guidelines state that you won’t have a deficiency after completion of a short sale. Here is the text from their short sale guidelines:

” A borrower who successfully sells the property securing the loan using the Pre-Foreclosure Sale Option is relieved of the mortgage obligation. The borrower shall not be pursued for deficiency judgments by either the Servicer or the Agency.”

This is good news for anyone that has an USDA and wants to get out from under their upside down mortgage. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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Will I Owe A Deficiency On A Raleigh Short Sale If I Have A VA Loan?

May 4, 2012 By

Raleigh NC – Another common type of loan that does not usually have a deficiency is a VA loan.

But, how do you determine whether or not you have an VA loan?

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

On your original mortgage, 1-4 pages past the signature page will be a VA Rider. At the top it will say “NOTICE: THIS LOAN IS NOT ASSUMABLE WITHOUT THE APPROVAL OF THE DEPARTMENT OF VETERANS AFFAIRS.”

That is a VA loan. The picture above is from a VA mortgage. The page for the VA mortgage was 2 pages below the original signature page of the mortgage.

The pages between this and the signature page had the notary’s signature and the legal description. You can get a copy of your mortgage from the public records in your county.

Most realtors will know how to look up this information. If not, then they will know a title company that can do the research for you.

A VA Short Sale is called a “Compromise Sale.” According to those guidelines, they will give a complete release if a seller participates in the short sale program, and there was no “fraud, misrepresentation, or bad faith” on the part of the homeowner.

The bad news is that you will not be eligible for another VA loan until you repay the VA for their loss. So you may not be able to get a VA loan in the future. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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Will I Owe A Deficiency On A Raleigh Short Sale If I Have An FHA Loan?

May 4, 2012 By

Raleigh NC – The next most common type of loan that does not usually have a deficiency is an FHA loan.

But, how do you determine whether or not you have an FHA loan?

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

Here is the best way that I have found to do this. Look up your mortgage on the public records in your county. You can usually access the public records online.

Just Google, “County, State Public Records.” For example, if we Google “Cook County Illinois Public Records”, then you will get the clerk of court’s website on the second link.

Most realtors will know how to look up this information. If not, then they will know a title company that can do the research for you. Once you access the public records you will want to pull up your mortgage.

If you have an FHA loan, then on the first page of the mortgage, there should be a small square and inside the square, it will say “FHA Case Number 091-4242640-703.”

FHA’s Short Sale Guidelines are covered in a letter they end out to all the lenders that are handling their loan. Whenever they make a change to the guidelines, they send out a Mortgagee Letter.

They issued a new Mortgagee Letter at the beginning of the financial crisis that made a lot of changes to how they handle short sales. That letter was called “Mortgagee Letter 2008-43.”

You can Google that if you want to look at a copy yourself. On page 5 of Mortgage Letter 2008-43, it specifically states that if you short sale or attempt to short sale, then you will be released from the debt.

Here is an excerpt from the letter:

Mortgagors, acting in good faith, who successfully sell their properties using this option are relieved of their mortgage obligation and are entitled to a consideration of $ 750. If the closing occurs within 3 months of the approval to participate, the mortgagor will be entitled to $ 1,000. Unless the mortgagor’s consideration is required to release junior liens, the mortgagor may elect to accept cash paid at closing. The mortgagor may also apply a portion of or the entire amount of consideration to offset sales costs not paid by HUD; including a home warranty plan fee, costs of optional repairs, and buyer’s closing expenses. If the PFS is unsuccessful and foreclosure occurs, mortgagors who participate in the PFS Program in good faith will not be pursued for deficiency judgments by the mortgagee or HUD.”

The main requirement to being allowed to participate in the program is that the property cannot be an investment property and that the homeowner has to have a genuine hardship.

Looks like a good way to wipe out some upside down mortgage debt. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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A Common Raleigh Short Sales: The Most Common Types Of Loan That Do Not Require A Deficiency

May 2, 2012 By

Raleigh NC – OK, let’s talk about the most common types of loans that do not require a deficiency on a short sale. The first common loan type is a Fannie Mae or Freddie Mac loan.

I’ll call them Fannie & Freddie in this post. Freddie & Fannie are different quasi-governmental entities that own mortgages. For our conversation, they are very similar in the way they handle short sales.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

First, you need to find out if Fannie or Freddie own your loan.

Fannie Mae has a website with a lookup tool. Go to this site to research if your loan is owned by Fannie Mae: www.fanniemae.com/loanlookup/

Freddie Mac has a lookup tool here: ww3.freddiemac.com/corporate/

If your loan is owned by Fannie Mae, then you usually do not have to worry about a deficiency. Fannie Mae’s official policy is that they will forgive the debt if a seller has a genuine hardship.

Fannie & Freddie’s policies are basically the same. They state that they will pursue a short sale seller if they have they can afford to make the payment or it is an investment property.

You need to keep this in mind if you are strategically defaulting. One problem with some of these short sales is that the loan was insured by Private Mortgage Insurance, also called PMI.

The PMI companies have the ability to approve or veto the short sale offer. Many PMI companies ask for a promissory note before they will approve a short sale.

The good news is that the promissory note is usually less than the amount lost. For example, we recently saw a lender lose over $ 100,000 on a short sale. They asked the homeowner for a $ 20,000 promissory note.

Are you willing to pay $ 20,000 to walk away from $ 100,000 in debt? I think that’s a good bargain.

If you have a Fannie or Freddie Loan and have a genuine hardship, then you can be pretty confident that you have a very good shot at being able to walk away without a deficiency. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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A Common Raleigh Short Sale Myth: You Don’t Know If Your Lender Will Want A Deficiency Until We Have Started The Short Sale Process

May 2, 2012 By

Raleigh NC – I am about to explain how the different types of loans impacts whether or not you will have a deficiency after you short sale your house.

But, I first want to bust the common myth that you won’t know if you will have a deficiency until after you have started the short sale process.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

Many agents will tell you that you won’t know for sure if you will have a deficiency until you have started the short sale process. Sure, they can give you the answer if you are in a non deficiency state, such as California.

But, what if you are in Florida, which is a deficiency state? They will usually tell you that you won’t know if you will have a deficiency until the short sale process has been started.

That is not necessarily true. First, here is the good news. In about 80-90% of all cases, you will not have a deficiency on a short sale even if you live in a deficiency state.

But, if your loan is the type that do not require deficiencies, then you don’t have to worry about a deficiency. The key is to find out the type of loan you have and the short sale guidelines for that type of loan.

In my next post I will start to explain those different loan types and their short sale guidelines. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751 . ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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An Eighth Common Raleigh Short Sale Myth: I Can Erase Any Deficiency On My Upside Down Home By Simply Declaring Bankruptcy

April 9, 2012 By

Raleigh NC – A lot of people incorrectly think that bankruptcy is a “Get Out Of Jail Free” card. Yes, bankruptcy does not help a lot of people get back on their feet.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

However, it is not a “Get Out Of Jail Free” card, despite what many people think. Let me explain why not.

Not everyone qualifies for bankruptcy. The bankruptcy laws were dramatically changed in 2005. Now you have to qualify for bankruptcy.

If you don’t qualify, then the bankruptcy judge will throw your case out. Your creditors will still be able to pursue you. They may be able to levy your bank account, garnish your wages, or take your tax return.

What can you do to avoid this? First, hire a highly qualified short sale realtor. Look for someone with lots of experience who will negotiate hard with the bank.

You want them to convince the bank to release you from the upside down mortgage debt. If they are unable to convince the bank to release you from the debt, then you need to consult with a good bankruptcy attorney.

Just like not all short sale realtors are created equal; not all bankruptcy attorneys are the same either. Find one that is highly experienced. They will explain the intricacies of bankruptcy law to you.

They will know whether or not you can qualify for bankruptcy. They may even know how to get you to qualify when other attorneys would say you aren’t eligible for bankruptcy. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at ken@goldensrealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, Ken Smith.

Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:

Phone: (919) 606-8751. ken@goldensrealty.com.

Friendly, loyal, intelligent service!

View My homes for sale at www.GoldensRealty.com.

Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.

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