short sale or deed in lieu of foreclosure
One of our subscribers writes that they have an option ARM loan and they owe more than their house is worth. They tried a short sale but it didn't work, even priced $40,000 less than they thought it should sell for.
The lender won't do a deed in lieu of foreclosure.
This person writes that they haven't been late and have been making what is apparently a negative amortizing payment, meaning that their payments did not cover the entire interest due on the loan balance, which has grown.
And, they wonder about tax liablity with the IRS should they walk away from their loan.
Okay, my answer is that things are much better than they appear. I do have some information that can help you. I will be covering it soon on the MortgageReliefFormula.com blog and in an upcoming telephone seminar also. If you haven't already gotten on my email list, do so right now. Confidentiality always guaranteed:
Okay, as for a partial answer. It is always possible to do a short sale in any market. The reason the house doesn't sell is that 1) it isn't exposed to the market properly or 2) it isn't priced right.
There is always a price for selling a house, any house. The key is finding that price, and then showing the lender that the price is reasonable given today's realities.
In Mortgage Relief Formula I give step by step instructions for selling your house in nine days even if there are "no buyers". The system uses the round robin technique that only a few savvy investors have been aware of. It involves a kind of open auction. And I explain how you can show your lender why they should accept the short sale even when it seems low compared to what they thought your house was worth.
I also talk about this tax liability thing. I believe most folks have nothing to worry about when it comes to owing the IRS. The state may have different laws, but the federal tax liability for a short sale is not an issue so long as you can show you were "insolvent" when you did the short sale. The IRS has a form for showing your insolvency and most people who are under water on their house equity will be insolvent, so they will have no tax liability.
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3 Comments on short sale or deed in lieu of foreclosure »
Dennis @ 2:53 am:
Sounds good.
Loyd Cooper @ 11:46 pm:
Hello. I am not sure if I fit your criteria for "short sale", but my mortgagor is Countrywide. My house (in Ft. Wayne Indiana) was appraised at around
$130,000.00 just before the "Housing Market Collapse" in 2006. I tried to sell it during that time. Nobody was buying… everyone was afraid… there was a housing 'glut' here. It is a nice house even if it was built in the 30's. I cannot afford such a huge place any longer.
I am a single man living in a large 4-bedroom home in a nice middle-class neighborhood. I have lived here 10+ years and never missed a payment. I can no longer afford the heating bills; taxes and insurance on such a large house. I am also planning to move outside the country in less than 4 months (May 2008).
I plan to rent a much smaller apartment in the new country.
Can you offer me any advice in selling or getting rid of this place without just walking away? I have not tried to sell it yet, but many have said that is impossible in today's market. I hate to ruin an otherwise good credit record. I am a disabled Army combat veteran and do not work.
Any advice will be greatly appreciated.
Willie Hilliard @ 2:24 pm:
I am a single women with a 2 bedroom home. I am writing you because I have been commuting for 15 years to my job which is 120 miles away. Needless to say, I need to get from under my home and I am not patient enough to sell. I also have an elderly mom who is in a financial strain. Since, her home is larger than mine I think moving in with her and paying her bills would be much more economial for both of us. She is retired and on a fixed income. So sould I try Quick sale or the Dee in Lieu. The house needs many up grades and is liveable.
120 miles????
I have never heard of such a long commute. That is AWFUL.
I would try the 9 Day House Sale. You could sell it quickly, most likely, and get out from under.
warmly
–Richard
P.S. if you listened to language tapes, you could speak 50 languages by now