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Old 07-13-2012, 12:16 PM
 
Location: Lake Mary, Florida
793 posts, read 2,305,667 times
Reputation: 265

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Quote:
Originally Posted by aneftp View Post
I've always thought the mortgage relief act contributed to further pushing the housing market downwards. Let's see. More distress properties means further decline in home prices.

I for one cannot wait till this act expires. If people are broke than the IRS won't go after them. It's pretty simple. Prove to the IRS you are truly broke. No law was needed to waive this tax liability.

You short sale. IRS sends you the tax bill. They already have your recent tax returns. Show them the bank accounts. That's it. Why do we need this law anyways?

The pending tax liability is a deterrent to force you to keep your home and not bail out. If you are broke than the nuclear option is always to declare BK.

Really, personal opinions aside this is just the kind of blogging advice distress homeowners don't need to be reading.

To my knowledge you can't quote 'BK' on the IRS, you can negotiate and set up a repayment plan but more times than most the compounding of penalties and interest out weigh your monthly and become a spiral.

If you are a distressed homeowner please do your own research on the pro's and con's of whether to short sale or not and include a 'BK' attorney & real estate agent in your research.

Hope this helps,
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Old 07-19-2012, 08:45 PM
 
Location: Mid-Atlantic
1,820 posts, read 4,136,730 times
Reputation: 1910
Quote:
Originally Posted by braindead0 View Post
The IRS will continue to come after you,money or not. They will attach any wages you might make in the future, they will go after any assets you acquire... effectively forever.

I agree that the law shouldn't exist, if you were stupid and got in over your head you should pay the price. However don't think for a minute that the IRS will let you off if 'you can't afford it'..
I have to just address the " if you were stupid enough" part of this post.
We sold a house almost 3 years ago in a short sale.
Not because we were stupid or got in over our heads, but because the market environment forced us into it.
We built a home in MD well within our means ( we are mid 40's , husband mid 6 figures) , we had EVERY intention of this being a long term home, at least until our children graduated. Husbands company had just built a brand new multi million dollar r&d office , no signs of distress anywhere.
We put 20% down, no ARM.... We were well versed, prepared homebuyers.
Fast forward exactly a year.... My husbands company announces out of nowhere, they were sutting their doors!
No warning,no notice,no severance,no nothing, except 358ppl loosing their jobs-immediately!

He looked for a job in MD for 3 months after this happened to no avail at all. Was offered a great position with a company in SE PA, and at that point, it was our only option. Knowing the market had taken a huge turn for the worst, we weren't prepared for how bad it really was out there. There were foreclosures all over our area, people just walking away from their properties! And we had to use them as comps to ours, as unfair as that is/was.
We listed our home at a reasonable price but within weeks with no showings, 5 more foreclosures popped up and our realtor said, you are going to need to drop your price lower, below what we paid- a year before! Obviously we disn't have alot of equity after a year of ownership.
My husband moved while I stayed in our home for 6 months w/ our children , hoping our house would sell.
It didn't and home sale prices continued to plummet.
So that we could move & be a family together, we dropped our price again. After almost 2 years- our home finally sold! For over a $100k less than we paid for it. Heartbreaking.
Once we moved, we rented a home here in SE PA and continued to be responsible and pay for our mortgage on our home in MD for 2 years....
We tried to get a mortgage adj. but were told that because we were not in distress and had been paying, no one would help us. So, although we did the responsible thing by paying for our mortgage and our rent, we were penalized.... We lost, when all was said and done, almost $155 K of our money...

We were NOT stupid, just unlucky.

Stupid are those people that bought homes with 0% down, had an ARM and then expected to be able to walk away...
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Old 07-20-2012, 06:10 AM
 
Location: Reno
843 posts, read 1,967,940 times
Reputation: 585
IMO, Failure to plan for the worst case = suboptimal intelligence. However this is all off topic.

So far I haven't seen any signs of things speeding up, although ours did finally get past short sale.
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Old 07-20-2012, 04:06 PM
 
3,576 posts, read 6,283,614 times
Reputation: 1432
Quote:
Originally Posted by NYMD67 View Post
I have to just address the " if you were stupid enough" part of this post.
We sold a house almost 3 years ago in a short sale.
Not because we were stupid or got in over our heads, but because the market environment forced us into it.
We built a home in MD well within our means ( we are mid 40's , husband mid 6 figures) , we had EVERY intention of this being a long term home, at least until our children graduated. Husbands company had just built a brand new multi million dollar r&d office , no signs of distress anywhere.
We put 20% down, no ARM.... We were well versed, prepared homebuyers.
Fast forward exactly a year.... My husbands company announces out of nowhere, they were sutting their doors!
No warning,no notice,no severance,no nothing, except 358ppl loosing their jobs-immediately!

He looked for a job in MD for 3 months after this happened to no avail at all. Was offered a great position with a company in SE PA, and at that point, it was our only option. Knowing the market had taken a huge turn for the worst, we weren't prepared for how bad it really was out there. There were foreclosures all over our area, people just walking away from their properties! And we had to use them as comps to ours, as unfair as that is/was.
We listed our home at a reasonable price but within weeks with no showings, 5 more foreclosures popped up and our realtor said, you are going to need to drop your price lower, below what we paid- a year before! Obviously we disn't have alot of equity after a year of ownership.
My husband moved while I stayed in our home for 6 months w/ our children , hoping our house would sell.
It didn't and home sale prices continued to plummet.
So that we could move & be a family together, we dropped our price again. After almost 2 years- our home finally sold! For over a $100k less than we paid for it. Heartbreaking.
Once we moved, we rented a home here in SE PA and continued to be responsible and pay for our mortgage on our home in MD for 2 years....
We tried to get a mortgage adj. but were told that because we were not in distress and had been paying, no one would help us. So, although we did the responsible thing by paying for our mortgage and our rent, we were penalized.... We lost, when all was said and done, almost $155 K of our money...

We were NOT stupid, just unlucky.

Stupid are those people that bought homes with 0% down, had an ARM and then expected to be able to walk away...
Similar situation as you in Maryland except I recognized far ahead not to "chase the market downward". That was your mistake.

The issue is to price it correctly to began with. If you put 20% down. You could have dumped the place by pricing it 10-15% below your purchase price, maybe having to bring a few thousand to the table at closing.

I priced my home $25k below a short sale. Dumped the place and moved on. Lost a ton of money also. The short sale eventually sold for $50k less than my home after 2 years on market. I moved my home in less than 60 or so days.

People need to be smart about pricing to began with. Overprice it and you will dearly pay for it.
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