We are just two days into 2013, and I’m thinkin’ that it is gonna be another short sale year. I know that it is definitely going to be another awesome year for short sale listing agents (just as long as they get to work fast).
Here’s are 5 reasons to embrace the short sale in 2013:
- Short Sale Incentive Programs There seems to be an exhaustive list of short sale incentive programs, but our all time favorite (expiring in September of 2013) is the Bank of America Short Sale Assistance Program. This program pays up to $30,000 in relocation assistance to certain short sale sellers at closing. There are other programs from Citibank and Chase, and there is also the Treasury’s HAFA program. Many borrowers who seek relief often get to take advantage of these great incentive programs. And, rumor has it that more incentive programs are on the way.
- HARP 2.0 Responsible borrowers who are desperate to get some relief may look into this loan modification program and then learn that they do not qualify or are not interested. So, here’s yet another faction of the market that may consider short sale as a viable alternative.
- Fannie Mae and Freddie Mac Streamlined Short Sale Guidelines The new guidelines that became effective on November 1, 2012 should improve short sale processing times for Fannie Mae and Freddie Mac short sales.
- Tax Relief and Anti-Deficiency Waivers You’ve probably heard all the hoopla about the Mortgage Debt Relief Act being extended through the end of the year. Additionally, there are other tax laws that could apply and provide forgiveness to certain short sale sellers. Many states also have anti-deficiency statutes that will protect short sale sellers from further collection of legal activity after their mortgages are forgiven in a short sale.
- Short Sale Expeditor® Raving fans of Short Sale Expeditor® recognize that our vast experience with short sale processing and our many contacts at all of the major lending institutions help to decrease waiting periods and free you up to do what you do best—list and sell property (and make more money).
For all of these reasons, this is definitely gonna be the year of the short sale. Oh, yes… and when the Chinese New Year begins on February 10, it will also be the year of the snake.
Short Sale Expeditor
{ 9 comments… read them below or add one }
Melissa – As a short sale seller, we were finally able to get our short sale approved. But the investor that backs our B of A loan was very specific about wanting the ability to pursue our deficiency. Our realtor had not seen this and our lawyer had not seen this before. That being said, it scares me that maybe things are changing and banks are willing to spend the time and investment to pursue the deficincies (where typically they are willing to negotiate a cash settlement). We are 7 months into this process and I just want to move on, but I am having nightmares that next week they’ll track us down for the deficiency. Any thoughts? I realize there are so many details and facts and this may only be telling part of the story, but I tried to capture as much as I could. Thank you in advance!
What state are you in? If you are not in an anti-deficiency state, have your agent ask the bank what it is going to take to waive the deficiency–5k, 3k. Whatever it is, it might be worth it to avoid the deficiency and possible legal action in the future. We used to see this all the time before California became an anti-deficiency state.
I’m in Michigan. We tried to offer to waive it and they declined with no other reasoning – this is the part that’s making me shake in my boots.
In case I wasn’t clear, we offered a reasonable cash settlement. $8k for $70k deficiency.
If at first you don’t succeed, try again. If you cannot get anywhere, then I would recommend an email to the bank CEO or a well-worded tweet. That usually draws attention to your situation, and subsequently resolves it.
Melissa, great article. I just want to clarify regarding Deficency Waivers. I was just approved for a DIL. My mortgage is owned by Fannie Mae and Citimortgage is the servicer. I read online and on the Fannie Mae website that they will be waiving any deficiencys that is owned by Fannie Mae and the rule was implemented back in Nov 2012. I live in Chicago, Il and I want to know if in fact it is true that I will not be liable for any money owed when the closing commences. I just want to make sure that they cant come after me next year or 5 years from now.
Thank you
Since we write from California, you should definitely speak with an attorney about your state laws with respect to the deficiency. Also, your DIL letter should clarify the bank’s intentions. Best wishes!
My situation was a little different. I lived in Virginia. We filed bankruptcy in 1998 and were approved for a Modified Loan. Our mortgage lender was Bank of America. Around April, 2011 my husband and I separated. We listed our property and it wasn’t going anywhere. We kept lowering the price and my realtor talked to me about short sale. I was moving back to Ohio, and wanted to make sure everything was okay before I left. My realtor had my power of attorney to represent me in any property proceedings. We finally got an offer and B of A kept dragging their feet. It wasn’t the best offer. These people were patient and waited for almost 6 months and then decided to withdraw their offer. The good thing is that someone who looked at the property early on made a much larger offer. B of A accepted this offer and then the long process started. My realtor handled everything. She was terrific. We finally closed and when the settlement papers came, a letter from B of A came shortly after. This was this year, 2013. They said that our settlement was deficient of $22,000. They wrote off the balance and we ended up not owing anything; however, they said they are required to report this money to the IRS. I think having the right realtor and listen to their recommendations was the key for me. My question to anyone is whether or not will I have to pay taxes on this $22,000? I have researched the IRS sites and read where Congress Extended the Mortgage Forgiveness Debt Relief through 2013. My question is does this mean that I won’t have to pay taxes? I have read several IRS forms; Form 982 and publication 4681 and am very confused. If anyone has experienced this, please let me know.
I wanted to find out. I own a 3-family house which is located in NJ. Due to my serious health condition, its in a Short-Sale process now. It failed Housing Inspection sometime ago, and despite the fact that I’ve told them about this house being in Short-Sale process, The State still wants to send in Inspector for Re-Inspection. Since I have no money/ability to have it fixed up, they might fail it again and issue me penalties. Is there anything that can be done to have them understand the situation and wait for new owners to fix it? Thank you for anyone’s input.
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