San Diego Short Sale Blog!

Avoid Foreclosure, options to consider?

If you are one of the unfortunate people to fall behind on your mortgage payments you will receive many mailers offering to help you get out of your tough situation. Many of these people are not truly qualified to assist you in making the difficult decisions ahead of you. Most often, the reason someone falls behind on a san diego home loan is due to a situation that is out of their control. Maxum Realty is here to answer the tough questions before you decide to do anything. We assist home owners every day in choosing the right path to minimize loss and liability.

The # 1 thing you need to make sure you never do is sign anything that leaves you vulnerable to a deficiency judgement. Many agents who tout themselves as short sale experts are anything but. We go above and beyond what most agents are able to do. We strive to have any and all terminology removed from a lender short sale approval that leaves a homeowner with the potential of future litigation. The former is VITAL when negotiating a short sale with your lender.

Options - Foreclosure - Real Estate –Help

Here Are Several Options to Consider

Option # 1 Sell Your Home Before Foreclosure

The best option for you may be to sell your home if you have enough equity to pay off your existing liens. If you owe more than what your home is worth then you need to consult with the Maxum Realty short sale team to determine your best course of action. Using an experienced Realtor that works closely with banks will give you the time needed to "sell your property at the highest price possible. We are experts this process.

Option # 2 A Short Sale – A REAL Short Sale Expert Is Needed

If your home is worth less than what you owe on your mortgage, a short sale may be the best option for you. Instead of just walking away from the property and severely damaging your credit, a short sale will allow Maxum Realty to negotiate with your bank and get a short sale approved and closed. Not everyone will be approved to do a real estate short sale. Banks are not eager to take a loss on their investment but they also realize that if they take the home back through the foreclosure process they will likely take a loss equal or greater to this amount. A short sale allows the bank to take the loss and move on because essentially, the banks do not want to own real estate.

Maxum Realty works directly with the bank to show them this may be the best option available. It is likely in this current real estate market, that the bank will approve the short sale and accept the loss in order to avoid taking a larger loss if the property were to come back to them as a foreclosure.

The bank will be very selective in what they pay for when you sell your home through a short sale. You need to be aware of the downside of doing a short sale and what the tax implications may be. Despite a short sale having some downsides, the positives of this can still out weigh the negatives of losing your home through a foreclosure.

The Mortgage Forgiveness Debt Relief Act of 2007, also known as Section 2 of H.R. 3648 was passed to eliminate the short sale tax consequence of having to pay the additional tax that would be due on the loss to the bank. Basically, any loss to the bank would be treated as ordinary income to you because what was a loss to the bank became a gain to the former home owner. Keep in mind that this will eliminate the federal tax but you still may owe money to the state. You will need to speak with your tax professional to know what the consequences will be for your current situation. For more detailed information about short-sale-taxes."Mortgage Forgiveness Debt Relief Act of 2007, Section 2 of H.R. 3648a please refer to our page on a short-sale-taxes. Please feel free to call us with any questions and what your options would be. We can help you with a short sale in San Diego County.

Refinance Your Home

Refinancing your home and paying off the existing loan sounds easy and it may be an option that you have already pursued. In this current real estate market it has become almost impossible to refinance your home if you have less than 10-20% of equity. We may be able to show you some loan options that you have not been presented with but it's probably likely you have already explored this option and will not have many if any refinancing options available. Maxum Realty works with many different lenders and has access to many different types of loan programs but the refinance market has become very limited. If your ultimate goal is to stay in your home and you can't refinance your home your best option may be a loan modification.

Forbearance Agreement

Typically, a forbearance agreement is accepted by a bank when someone can show they had a temporary hard ship and this is the reason they fell behind in their mortgage payments. It has become fairly common and something that Maxum Realty can help you with. Two items a bank will look for when they consider a forbearance is the reason you fell behind in your mortgage payments, proof that your financial difficulties were a one time occurrence and not likely to happen again.

The forbearance takes the amount you owe and does 1 of 2 things: One option is to spread the amount you owe out over a period of 6 months. The other option is to add the amount owed on to the back end of your mortgage and have it paid at the end of your mortgage term. This may be an option that you were unaware of.

Deed in Lieu of Foreclosure

The advantages for the homeowner are to avoid foreclosure and not go through the difficult process that it entails. It will release all or most of the liability from the homeowner and allow the bank to turn around and sell the property much sooner without the bank having to spend additional time and money going through the foreclosure process. This would be a good option to consider if you feel that there will be no benefit from you selling your home or doing a short sale.

Do Nothing - Just Let it Go!

You can always let your home go into foreclosure and do nothing. Sometimes the situation seems so overwhelming and this may be a good option. We don't recommend that you do this, and would suggest that you talk to someone so you can determine if any of the options above would make more sense. We have agents that will provide you with answers to all of your home-selling-questions. You can also a contact us if you feel more comfortable. It's important that you talk to someone that you can trust, and not someone that is looking to take advantage of someone in a difficult situation. There are many real estate scams and you don't want to become a victim because you didn't seek a second opinion. You may have some options that you are unaware of.