Mortgage Debt Relief Act of 2007 Set To Expire At The End Of Year!

September 5, 2012 By

The clock is winding down on tax breaks available to homeowners looking to escape mountainous mortgage debt through a foreclosure or short sale.

The Mortgage Debt Relief Act of 2007 will expire at the end of the year, if Congress does not take action to extend it. Without that relief, homeowners who back out of their mortgages with a short sale or foreclosure have to pay taxes on the amount that is forgiven.

The Internal Revenue Service will levying taxes on the property as if the homeowners actually received the money. The tax relief is also available when debt (up to $2 million) is reduced as a result of a mortgage being restructured.

What does this mean to home owners who sell their home through a short sale?

“Let’s say you owe $150,000 on your mortgage, but your Realtor finds a buyer willing to pay $120,000. The bank approves the short sale and forgives the $30,000 difference. If you don’t complete the sale by Dec. 31, 2012, as of Jan. 1, 2013, that $30,000 in forgiven mortgage debt will be considered taxable income by the IRS.”

 

Jon Maddux, CEO of YouWalkAway.com, said if the debt relief act is not extended, the housing recovery will slow and the effects will be felt throughout the economy.

“If this act does not pass, we as a country will feel the effects years down the road.” Maddux said in a statement. “Most strategic short sales will stop immediately, because of the homeowner’s fear of a getting hit with a huge tax bill. If the act is not extended there will be massive tax consequences owed come April 2014.”

Maddux predicted a sharp increase in bankruptcy filings as a result.

Whether you are a seller or represent a seller time is of the essence. The short sale transaction must close by December 31st, 2012 to avoid possible tax consequence! 

If you have a need to short sale or represent a seller we get short sales approved more quickly then most companies. 

Should you have any questions complete the form below or call us at 561-624-9422.

Filed Under: Foreclosure, Home Selling, Mortgage, Short Sale Tagged With: , ,

Fannie Mae announced that it will implement new short sale guidelines

August 22, 2012 By

New Guidelines Streamline Short Sale Processes to Prevent Foreclosures and Help Communities Stabilize

 

Fannie Mae announced that it will implement new short sale guidelines for servicers to follow as part of the Federal Housing Finance Agency's Servicing Alignment Initiative. The new guidelines streamline documentation requirements, waive deficiencies for borrowers that successfully complete a short sale and set standard payments for subordinate lien holders. In addition, all servicers will have the authority to approve and complete short sales that conform to the requirements without receiving individual approval from Fannie Mae.

 "Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities," said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. "We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales, and make the process more efficient for homeowners and servicers."

Under the new guidelines, servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer. In addition, Fannie Mae is significantly reducing the documentation required to complete a short sale, including requiring no documentation of a borrower's hardship 90 days or more delinquent and have a credit score lower than 620. This will remove barriers for those homeowners who are most in danger of foreclosure and increase servicer efficiency in completing a short sale.

Fannie Mae will also limit subordinate-lien payments to $6,000. Previously, subordinate lien holders often attempted to negotiate higher payments. The servicer will be able to offer the maximum payment of $6,000 in order to facilitate the transaction. By setting a standard payout amount and a limit for every transaction, Fannie Mae is removing the guess work and standardizing the transaction to help accelerate the short sale process.

Fannie Mae has taken a number of steps to make the short sale process more efficient, including implementing a Short Sale Assistance Desk to help real estate professionals in targeted markets work out challenges in individual short sales, requiring servicers to complete short sale evaluations within 60 days and making military families who receive Permanent Change of Station orders eligible for a short sale. Fannie Mae completed 38,717 short sales through the first six months of 2012 and 70,025 in full year 2011.

Filed Under: Foreclosure, Home Buying, Home Selling, Short Sale Tagged With: , , ,

Knowing When To Flex Your Muscles On Short Sales

August 8, 2012 By

Atlantic Coast Title Group specializes in short sale processing and from time to time we find that we have to flex our muscles to get them approved. 

At times the negotiators for the short selling lender will not agree with us over a myriad of different issues. The most common issues are as follows:

  1. Sales Price
  2. Amount to pay the second lien(mortgage)
  3. Amount to pay on delinquent HOA dues
  4. Approving the sellers hardship

Many times negotiators are just missing in action and/or the file is constantly re assigned new negotiators. Fortunately for us we know which lenders are problematic and we know when and whom to escalate the file to. 

If your a real estate agent or a seller we are just a call away. We are happy to answer your questions and give you the best advice possible for any given situation. 

Call us at 561-624-9422 for more details.

Filed Under: Foreclosure, Home Buying, Home Selling, Mortgage, Short Sale Tagged With: , , , , , , ,

Atlantic Coast Title Group Rocks!

August 2, 2012 By

Make your own slide show at Animoto.

Filed Under: Foreclosure, Home Buying, Home Selling, Short Sale Tagged With: , , , ,

Success Leaves Clues: Warren Buffett Says Buy Homes Now!

June 25, 2012 By

Filed Under: Foreclosure, Home Buying, Mortgage, Short Sale Tagged With: , , ,

Short Sale Company Employee Turnover Got You Down?

June 20, 2012 By

 

Atlantic Coast Title Group Helping Short SaleYou are working with a short sale company/title/attorney and everything is going great with
regard to the processing of your short sale, when the employee you have been dealing with
decided to change companies or leave the industry!
 
1) Has this happened to you?
 
2) Has the service suffered?
 
3) Are the short sales taking longer to get approved due to the change?
 
One of the great things about Atlantic Coast Title Group is that we are family owned, so we do
not have the employee attrition. We take pride in providing the service necessary to you and
your clients.
 
We appreciate your loyalty to certain people and companies, however, we would like the
opportunity to show you how to cut down the time and get approvals on your short sales quickly.
Filed Under: Foreclosure, Home Selling, Short Sale Tagged With: , , , ,

Does A Borrower Need To Be Late On Payments To Do A Short Sale

June 19, 2012 By

 

Maybe. Maybe not. Some lenders/investors will require the Borrower to be 30/60 days late to receive short sale approval and some won't. We are a company who has successfully handled lots of Short Sales we still haven't figured out what triggers the "You must be late" requirement.

 

Recently we have experienced the following:

 

  • Sellers that have a legitimate hardship such as illness or job loss are more likely to be granted an exception on being late in order for the short sale to get approved. 
  • Every Lender/investor is different and we have closed short sales where the borrower did not have a true hardship. Many times these approvals take longer because they are less of a priority to the lender and in some cases a seller contribution may be required in order to receive a waiver of deficiency. However, we almost always are able to get the approvals.

It appears that there Is no set standard for whether a borrower must be late as each short sale is unique and each lender looks at the process of approval differently. 

Our best recommendation would be to initiate the short sale to determine what stance the lender is going to take. 

We are available for questions at 561-624-9422.

Filed Under: Foreclosure, Home Selling, Short Sale Tagged With: , , ,

Short Sales And Federal Tax Liens: It Can Be Done!

June 13, 2012 By

If you are doing a short sale on your property and you have a IRS Tax Lien, the IRS will release their lien from the property in order for you to sell your home. It takes WORK, but it can be done!

In cases where the homeowner owes taxes, the IRS may place a Federal Tax Lien against you and that tax lien will also affect you personally. The IRS tax lien covers all of the person’s property, including the home. Typically you can request the IRS to release their lien as to the property you are selling by completing the information requested in Certificate of Discharge of Property found in Publication 783, IRS website.

The reason the IRS records Federal Tax Liens in the public records of the county you live is so that they get paid when you sell the property. In a situation where the homeowner is upside down and they will not be receiving proceeds from the sale, the IRS may agree to release their lien as to that property.

We have dealt with the IRS on several occasions and they are not fun. However, the IRS tax lien must be addressed in order to complete the short sale. We have been successful in getting the IRS to release their liens.

This entire process should be coordinated in conjunction with your title company or attorney. It is always a good idea to make sure that you are working with a title agent who knows the entire process of obtaining releases from the IRS.

Complete the form below or call us at 561-624-9422 for more details!

Filed Under: Foreclosure, Home Selling, Short Sale Tagged With: , , , ,

Are Declining Foreclosures Good News For Housing?

June 1, 2012 By

A healthy housing market is at the center of a robust economy, so the dribs and drabs of good news regarding the housing sector have been especially welcome. Last week, an especially tasty morsel was reported by real estate data company Realty Trac: Foreclosure filings for April represented the lowest since 2007, falling 14% from a year previous. In addition, the Mortgage Bankers Association noted that delinquencies decreased in the first quarter as well, hitting the lowest mark in more than three years.

This is good news, indeed. Looking a little deeper uncovers some of the reasons for these improved numbers — one being that banks are disposing of troubled properties using an alternative to foreclosure called the short sale.

Banks discover the utility of short sales

Banks have stepped up the use of short sales over the past year, partly because of incentives from Freddie Mac, but mostly because of the increased efficiency and cost savings. Foreclosure proceedings are long and grueling and can cost banks upwards of $60,000 for each property it processes. Although short sales can complicate sales by requiring the bank, borrower, and buyer to come to an agreement on price, banks are finding that accepting less than the homeowner owes is preferable to foreclosure. They like the method so much, in fact, that some of the largest banks are offering incentives to troubled mortgage holders to enlist their participation.

Bank of America (NYS: BAC) , whose exposure to bad loans intensified when it acquired Countrywide Financial in 2008, began offering incentives last year of up to $30,000 in relocation expenses to homeowners who qualified and signed on for the program. JPMorgan Chase (NYS: JPM) also started offering borrowers amounts as high as $35,000 last year, acknowledging that short sales are a quicker solution than the foreclosure process. Wells Fargo (NYS: WFC) jumped in last year as well, though its incentives are lower than what the other two banks offer — between $3,000 and $20,000.

Banks that signed the $25 billion foreclosure settlement earlier this year will also be offering select customers principal reductions as part of the agreement. Bank of America recently sent its first batch of letters out to eligible borrowers, and fellow signatories JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial are expected to follow suit. This should help keep hundreds of thousands of underwater loans from entering the foreclosure pipeline as well.

Fool's take

Short sales and other programs are helping to lower foreclosure numbers, which can only help the housing recovery. They have the added benefit of being less destructive to the borrower's credit, which might help turn at least some of them into buyers of more affordable homes more quickly than if they had been foreclosed upon.

Short sales are also on track to become shorter. New regulations are coming soon from Fannie Mae and Freddie Mac, requiring banks to decide on terms within 30 days. Halting steps, perhaps, but forward motion, at a quickened pace, is just what the housing market needs right now.

Excerpts From:

By Amanda Alix, The Motley Fool

Posted 5:38PM 05/23/12
Filed Under: Foreclosure, Home Selling, Mortgage, Short Sale Tagged With: , , , ,