Archive for 'Sell Fast Realty'

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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HAFA Short Sale – Can I get $3,000 from HAFA to move?

Tuesday, November 8th, 2011 at 12:40 pm  
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Will my Lender pay me any money to move with the HAFA program?

The Home Affordable Foreclosure Alternative (HAFA) program does allow a relocation fee of up to $3,000 paid to the homeowner if they claim their home as a homestead exemption.  The HAFA program does not apply to investment properties.  The deadline for the HAFA program is DECEMBER 31, 2012.  If you are considering a short sale and you would like to be paid $3,000 through the HAFA program to relocate, please call us immediately as it takes time to do the short sale.  There are other requirements such as having a utility bill in your name and having occupied the home within the past 12 months.  The HAFA terms are subject to change based on your loan.

The HAFA program does put a stipulation on participating lenders (not all lender participate in this program), that they will accept the short pay with a full satisfaction of the loan and not go after you for the difference known as a deficiency judgment.

There is a stipulation put on the buyer of the property that they will not resell the property for 90 days.  If an investor was going to buy your house to fix it up and resell it, they would have to own the house for 90 days before reselling it.  Sometimes, there is not enough profit to the investor to do that, so it is very important when using this program that the buyer is fully aware of the lender’s stipulations.  As your Realtor, we pre-qualify all buyers to let them know the lender’s requirements including the HAFA program.  This prevents the so-often-heard scenario of sellers getting their short sale approval letter and then the buyer doesn’t qualify to buy the property and the entire file gets shut down and you have to start all over again.

At what point during the short sale process, should I move out of the house?

This will vary per situation.  I have homeowners stay all the way to the week before the closing and I have other homeowners move out right away.  Do you have family or friends you can live with or are you going to rent somewhere?   Most people never even think about the fact that they may not qualify to live somewhere else due to their credit.  If you are not going to do a loan modification, you need to find a place to live now while your credit is decent.  We suggest that you submit rental applications as quickly as possible.  Many people are actually renting bigger and better homes, sometimes even in the same neighborhood.

Many homeowners will stay in the house to the last minute thinking that they are saving money.  This could actually cost them money for various reasons and by that time, they may not qualify to rent a new house.  If the house goes to foreclosure for $150,000 plus attorney fees etc. and the house could have sold for $90,000, it cost the homeowner $60,000 to live there.  Remember everyone’s circumstance is different and you need to make sure to protect you and your family.

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 and we can see if the HAFA program is for you. 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
Real Estate Broker & Short Sale Negotiating Expert
407-888-3433
www.shortsalenegotiating.com
 

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