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Short Sale IRS form 982 April 15, 2010

Posted by orlandoshortsalefl in 1099C short sale, IRS form 982, Mortgage forgiveness debt relief act, Orlando pre foreclosure, Orlando Short Sale, Orlando short sale Realtor, short sale.
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I want to let you know I am not giving you tax or legal advice. I am not an accountant or an attorney. This is my opinion as a short Sale Realtor

Today is tax day. If you received a 1099C today is the day to have you or your accountant file this form with your taxes. The 1099C is for debt forgiveness mainly on a short sale and the 1099A is for abandonment mainly for a foreclosure. Do not forget to file this form with your IRS taxes. 

On a short sale the lender will issue you a 1099C in most cases for your first lien. You may also get a 1099C for the second so include both. This is the balance of the debt not paid for from the short sale of your home. This is where a tax attorney or accountant comes in. They will be able to counsel you in the best way to discharge this income. 

Whatever you do, even if you don’t use an accountant or attorney do not forget to claim this amount on your taxes if applicable. Also if you do file yourself use form 982 from the IRS and follow the instructions. I tell all my clients to seek professional advice in regards to this form. You do not want to have an additional $50 or $100,000 in income. 

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation.

The above act was enacted in 2007 and currently goes to the end of 2012. I would also say to read this document if you are going to do this yourself. Remember this is your right to use this. Do not forget to include this form if you have a 1099C cancellation of debt. 

And one more disclaimer. I want to let you know I am not giving you tax or legal advice. I am not an accountant or an attorney. This is my opinion as a short sale Realtor

  When you hire an agent ask them to show you their approval letters or some of their closed sales. You want to have an expert on your side. Wendy and I have this and we have the documentation to back it up. Remember foreclosure is the last resort. Contact me at www.scottnwendy.com or paganorealtor@gmail.com or you can use my 24 hour recorded info hotline 1-866-647-8425 EXT 104

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Home Affordable Foreclosure Alternatives Program (HAFA) April 10, 2010

Posted by orlandoshortsalefl in Florida Foreclosure, Foreclosre, Foreclosure, Foreclosure in Orlando, HAFA, orlando foreclosure, Orlando pre foreclosure, Orlando real estate, Orlando Short Sale, Orlando short sale Realtor, short sale, short sale PMI, short sale realtor, Stop foreclosure.
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This is my take on the HAFA or Home affordable Foreclosure Alternatives Program. I have read the 45 page document and there have been some changes already since the December announcement. 

To qualify for HAFA the home must be your primary residence, not a second home or investment property. Also your first mortgage must be under $729,750 and you must be in default or be close to default. Also your monthly mortgage payment must exceed 31% of your income. Lastly the loan must have originated before January 2009. 

Now the big thing everyone is talking about is the banks have to approve the short sale in 10 days. Good luck with that. The banks have 10 days to accept or decline the offer that is reality. The banks will set a minimum offer they will take up front. I will guarantee this will be above Fair Market Value. Then they will go back and forth until they get the offer they want. This will take 30 to 60 days or more with all the counter offers. 

What do the banks get out of this. Well it is a voluntary program the banks do not have to do HAFA. The first lender can give up to 6% of the seconds loan balance or $6,000 total. The first lender will get $1,500 from the Government for doing HAFA and an additional 1$ for every 3$ they pay to the second lien. 

The homeowner gets $3,000 moving expenses and a full release from the first, second and PMI/MI companies. This means no deficiency judgement, no promissory note and no cash contribution. A full release of liability for the debt. Wow that sounds great, hunh? To the homeowner yes to the banks HELL NO. This means on a S200,000 mortgage lets say the short sale is $100,000. The bank is going to eat $100,000. Yea I’m sure the banks are going to line up for this. This is going to be the tough part of HAFA. 

Also don’t forget all lenders 1st, second and MI/PMI companies have to sign off on this. The bank can also require the homeowner to pay 31% of his or her income as a mortgage payment to the bank while the short sale is being negotiated. 

So I would like to know what you all think. Down here in Florida its Y’all think. Are the banks going to be able to handle this additional loss? Do you think they want to give up their right to a deficiency judgement? What about the PMI/MI company no more prom notes? It will be interesting to see how this plays out. 

One last thing if the banks won’t do HAFA don’t worry a short sale is still better for them than a foreclosure any day of the week. Just make sure when you hire an agent ask them to show you their approval letters or some of their closed sales. You want to have an expert on your side. Wendy and I have this and we have the documentation to back it up. Remember foreclosure is the last resort. Contact me at www.scottnwendy.com or paganorealtor@gmail.com or you can use my 24 hour recorded info hotline 1-866-647-8425 EXT 104

Bank of America Equator Short sale April 3, 2010

Posted by orlandoshortsalefl in Bank of America, Bank of America short sale, Florida Foreclosure, Foreclosre, Foreclosure, Foreclosure in Orlando, Orlando pre foreclosure, Orlando Short Sale, Orlando short sales.
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Well Bank of America is finally closing out the old way of doing short sales. From what I have been told the fax machine to send the documents will no longer be available to agents or homeowners. 

The bank will only accept offers from Owners and Realtors. No more For Sale By Owners, FSBO. They want to make sure the offer is listed in MLS now. I have not had to use this system.  I have heard good and bad about it. The buyers and sellers must be told upfront what is expected from them. 

From the negotiators I have spoken to, they believe it will make the short sale process go much faster. The last negotiator I spoke with on Thursday told me 60 days start to finish. If this is the case then we are in for a treat. 

The system assigns tasks to the Realtor, the homeowner and the negotiator. All parties are only given a certain time to complete each task. One problem if you miss this deadline they close your file. Also if the buyer backs out you have to start from the beginning. Ouch!! 

I hope they come up with a way to fix those last two issues. Only time will tell if this will work. Once I have an Equator file I will post on the results from start to finish. My three files I have with Bank of America are all in the final stage of negotiation. I am sure I will have another file to start soon. 50% of my clients have had Bank of America loans. Equator here we come whether we like it or not. When you hire an agent ask them to show you their approval letters or some of their closed sales. You want to have an expert on your side. Wendy and I have this and we have the documentation to back it up. Remember foreclosure is the last resort. Contact me at www.scottnwendy.com or paganorealtor@gmail.com or you can use my 24 hour recorded info hotline 1-866-647-8425 EXT 104