Archive for 'foreclosure'

What is the difference of a “Full Satisfaction of Loan” versus a “Lien Release Only” Short Sale?

Sunday, November 13th, 2011 at 12:35 pm  
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Full Satisfaction of Loan versus a Lien Release Only

Understanding the outcome on a short sale is vital not only to the Seller but to the Realtor.  Below I explain the different types of short sale approvals.

There are two different types of Short Sale Approvals:

  • Full Satisfaction of Loan
  • Lien Release Only

A Full Satisfaction of Loan means that you will not owe any more money on this loan after your buyer pays the short sale amount of $90,000.  It also means that the lender will not pursue you for a deficiency judgment on the remaining $60,000.  A Lien Release Only means that the lender is releasing the lien on the house for a partial payment ($90,000) just so you can sell the property.  However, you are still liable for the difference and the bank could pursue you for the deficiency of the $60,000.  I suggest reviewing your Short Sale Approval Letter thoroughly and really understand what you are reading.  This is what Sell Fast Realty does for you; however, many Agents don’t explain the details to you and by the time you realize that your letter stated a “lien release only,” you are sitting at the closing table.

What happens if the Lender will only allow a “Lien Release Only” for my Short Sale?

Should the short sale approval letter from your lender be a lien release only then you will have to determine which is better:  1) let the house go to foreclosure sale and possibly owe even more later because market values are still dropping and your deficiency could be even greater, or 2) sell the house now with a lien release only.  I have represented some sellers who had to make this decision.  I have yet to see a seller choose to let their house go to foreclosure sale.    If you receive a lien release only, the lender has the right to choose whether they just want to give you a 1099-c form or a deficiency judgment.  Again, it is crucial that you thoroughly review and understand your Short Sale Approval Letter.

Can you guarantee a Full Satisfaction on my short sale?

No, but no one can until they receive and review the letter from your lender.  There are too many variables such as type of loan, number of loans, hardship, etc.  I have had a few lenders request money from the sellers either by a promissory note or by bringing cash to the closing.  They may request either of these options or a combination of both.  If a seller is in agreement, then the lender will almost always negotiate that deficiency even lower if the seller is willing to contribute by a promissory note or by bringing cash to the closing.  If the lender won’t approve the short sale without a seller contribution, your Sell Fast Realty short sale experts negotiate that amount down as low as possible.  For example, a Promissory Note would be paid by the seller to the lender at 0% interest for 15 to 30 years at a drastically reduced amount.  The highest promissory note amount that any of my sellers have received was $25,000, 0% interest, paid at $70 per month until paid in full.

TWO THINGS A LENDER CAN DO TO THE SELLER – THEY CAN NEVER DO BOTH!

1.  Provide them with a Deficiency Judgment

2.  Provide them with a 1099

 

What’s the next step for me?

Take Action Now by calling us at 407-888-3433 or call the Sell Fast Realty Agent who provided you with this Special Report.  You can also go online at www.SellFastRealty.com or www.FreeFactsAboutForeclosure.com and fill out the contact information.  Please be sure to fill out the form completely for a quicker response.  We will contact you personally within 24 hours to tell you how our expert short sale team can relieve your stress….. Our #1 Focus is YOU!  I am honored that I can educate you with the true facts about foreclosure. I am sure you have some more questions after reading this Special Report and we look forward to discussing them with you on a personal and confidential call with you.

Kimberlee Frank, Broker

www.SellFastRealty.com

www.ShortSaleNegotiating.com

407-888-3433

 

 

 

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Deficiency Judgment or a 1099-C which should a Seller receive?

Sunday, November 13th, 2011 at 12:11 pm  
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What is a Deficiency Judgment?

A Deficiency Judgment is the difference in what the property was sold for and what you owed on the mortgage, including interest and attorney fees.  Your lender has the right to come back after you for 25 years to collect on the difference.  They have 5 years to file a deficiency judgment and 20 years to collect from you…for a total of 25 years.

 

Many sellers will just give up and walk away from their house.  The most famous speech from Winston Churchill was “NEVER GIVE UP, NEVER GIVE UP, NEVER GIVE UP, NEVER GIVE UP and NEVER GIVE UP.   When sellers walk away and let their home go to foreclosure, they think it’s over… but it’s not!  When you walk away, you are allowing your lender the right to obtain a deficiency judgment and come back after you for the amount owed for 25 years.   Our market is not increasing, but decreasing, so by the time your lender gets the house back to resell, you are going to owe even more.

Our company has a high success rate in getting your lender to accept the short sale and waive the deficiency judgment (see Testimonials on www.SellFastRealty.com).  Having our Sell Fast Realty team negotiate on your behalf leaves you in control of the outcome of the property.  Our #1 Focus is YOU!

What is a 1099-c?

A 1099-c is like a W-2.  This is income that you receive.  However the 1099-C is what the lender uses to forgive your debt and some sellers are required to pay taxes on this amount.  Homestead owners of property only have until December 31, 2012 to take advantage of the Forgiveness Act that President Bush put into place to excuse the owners from having to pay income tax on the 1099-c from their short sale.  There are some additional terms; I am not a CPA or an attorney, so I would highly recommend that you contact one.  However, many of the homeowners I have helped did not have to pay taxes on the 1099-c.

NOTE:  I don’t know if the Forgiveness Act will be extended, so you need to ACT NOW!!

If the property was an investment property for you and you receive a 1099-c, you still may not owe any additional taxes, as it could still be a loss for you.  Again, this is a direct question for your CPA to answer.

Many sellers are able to have their CPA file a C982 form which states that “their liabilities outweigh their assets” so they are exempt from paying the taxes.  Please talk to your CPA about your specific situation.

 

What’s the next step for me?

Take Action Now by calling us at 407-888-3433 or call the Sell Fast Realty Agent who provided you with this Special Report.  You can also go online at www.SellFastRealty.com or www.FreeFactsAboutForeclosure.com and fill out the contact information.  Please be sure to fill out the form completely for a quicker response.  We will contact you personally within 24 hours to tell you how our expert short sale team can relieve your stress….. Our #1 Focus is YOU!  I am honored that I can educate you with the true facts about foreclosure. I am sure you have some more questions after reading this Special Report and we look forward to discussing them with you on a personal and confidential call with you.

Kimberlee Frank

Broker and Short Sale Negotiating Expert

www.SellFastRealty.com

www.ShortSaleNegotiating.com

407-888-3433

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Does a Seller have to pay closings costs and Realtor commissions on a Short Sale?

Tuesday, November 8th, 2011 at 12:52 pm  
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Does a Seller have to pay closings costs and Realtor commissions on a Short Sale?

NO, you don’t have to pay closings costs and realtor commissions on a short sale!  On a short sale, even though you are the seller, the lender allows certain fees to be paid out at closing that normally the seller would have to pay, i.e. title work, transfer tax, Realtor commissions, etc.   Sometimes the Realtor fees are reduced in order to sell the property on behalf of the seller.  That means that our service is absolutely FREE to you, as your lender(s) allows the Realtor(s) to receive commission on the sale of the property.  If we don’t sell your house then we don’t get paid.

What price, condition and location does my house have to be in order for you to help?

We have negotiated and closed short sales on homes in any location (primarily throughout Central Florida), price and condition.  In all of our purchase contracts we put the following clauses:

  1. “The seller is selling the property AS-IS, with no contributions for repairs.”
  2. “The buyer will turn on the utilities for inspection.”

 

These provisions in the contract make the buyer pay for all the repairs to the home that may be necessary for the buyer’s mortgage approval, and the buyer pays to have the utilities turned on for inspection, should they not already be on.

Can I back out of the Short Sale?

 We always put a provision in the contract that gives control to our sellers that states “This offer is subject to the lender taking a short sale acceptable to the seller and waiving the deficiency judgment.”  Should we obtain a short sale but there is a deficiency judgment, then you can choose not to sell the property – You are in control.

What’s the next step for me?

Take Action Now by calling us at 407-888-3433 or call the Sell Fast Realty Agent who provided you with this Special Report.  You can also go online at www.SellFastRealty.com or www.FreeFactsAboutForeclosure.com and fill out the contact information.  Please be sure to fill out the form completely for a quicker response.  We will contact you personally within 24 hours to tell you how our expert short sale team can relieve your stress….. Our #1 Focus is YOU!  I am honored that I can educate you with the true facts about foreclosure. I am sure you have some more questions after reading this Special Report and we look forward to discussing them with you on a personal and confidential call with you.

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