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Old 08-08-2008, 12:40 PM
 
2 posts, read 7,089 times
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I spoke with my bank about doing a short sale. They warned that after It was complete I would still owe them money. Is that correct? Is that normally negotiated out?

My credit will not be good until I pay off the judgment. It seems a short sale is not any better than forcloser.

Las Vegas, Nevada
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Old 08-08-2008, 08:14 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,111,845 times
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Quote:
Originally Posted by toaduu View Post
I spoke with my bank about doing a short sale. They warned that after It was complete I would still owe them money. Is that correct? Is that normally negotiated out?

My credit will not be good until I pay off the judgment. It seems a short sale is not any better than forcloser.

Las Vegas, Nevada
depends on what state your in.. I am in NY and I won't owe after my short sale.

and. normally in the past if the debt was forgiven or written off by the lender, then it would be reported to the IRS as income and you would have to pay taxes on that money as if you actually earned it (kind of stupid.. I mean how can you pay taxes on money you never had..kick someone while htey are down why dont' ya!) but earlier this year President Bush passed into law a bill that would forgive the difference of what was forgiven on an foreclosure or short sale and it will ot be taxable.
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Old 08-10-2008, 08:20 AM
 
Location: Leaving fabulous Las Vegas, Nevada
3,836 posts, read 6,606,791 times
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My friends selling their house in Vegas told me they were writing a check on theirs!
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Old 08-10-2008, 08:25 AM
 
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I wrote a check for over 24k on the sale of my last house.

It isn't any fun and doesn't appear to be the popular thing to do right now. But you sleep better at night.
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Old 08-10-2008, 02:31 PM
 
220 posts, read 659,587 times
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Quote:
Originally Posted by TristansMommy View Post
but earlier this year President Bush passed into law a bill that would forgive the difference of what was forgiven on an foreclosure or short sale and it will ot be taxable.
However, according to the IRS, the Mortgage Forgiveness Debt Relief only applies to the original principle debt before your home was refinanced. Also, it only applies to your primary residence.
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Old 08-12-2008, 10:18 AM
 
Location: Pennsylvania, USA
5,217 posts, read 4,111,845 times
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Quote:
Originally Posted by RonAriba View Post
However, according to the IRS, the Mortgage Forgiveness Debt Relief only applies to the original principle debt before your home was refinanced. Also, it only applies to your primary residence.

It applies to your primary residence and only if you have one mortgage.. not a second mortgage.
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Old 08-13-2008, 04:07 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,674 times
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Quote:
Originally Posted by toaduu View Post
I spoke with my bank about doing a short sale. They warned that after It was complete I would still owe them money. Is that correct? Is that normally negotiated out?

My credit will not be good until I pay off the judgment. It seems a short sale is not any better than forcloser.

Las Vegas, Nevada
have you offered the deed in lieu of foreclosure?
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Old 08-13-2008, 06:47 PM
 
Location: Pennsylvania, USA
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Deed in lieu of foreclosure is no better than a foreclosure and has the same affect on your credit rating as a foreclosure.. you are basically just let the bakn foreclose without them having to go through the time and proccess it takes.

I googled.. and found that a foreclosure affects your score by 240, whereas a short sale affects your score by 80.. still a hefty blow. ..but far better than a 240.

From other posters it appears that Nevada is a state where they can come after you for the difference if they'd like.. NY.. they can't.

Right now, believe it or not, you have some of the power.. here's why. If you put it on the market and short sell you will be trying to get the bank as much money back as possible. If you don't and foreclose, they stand to loose a lot more. Perhaps you can sort of negotiate with the bank and basically ask that they forgive the difference if you short sell.. then try to get them as much as possoble. Let them send out their appraiser and then base it slightly above that appraisal amount.. and you will get a lot of action....

AND.. if a bank forgives you the difference.. you do not have to report it as income according to anew law Bush passed early this year forgiving the forgiven debt taxable.

Whatever you do , short sell. is better than foreclosure.. although foreclosure is not theendo f the world..

You could declare bankruptcy too and that may help avoid paying the difference.. but I would consult with an attorney
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Old 08-13-2008, 08:43 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,484,948 times
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Quote:
Originally Posted by toaduu View Post
I spoke with my bank about doing a short sale. They warned that after It was complete I would still owe them money. Is that correct? Is that normally negotiated out?

My credit will not be good until I pay off the judgment. It seems a short sale is not any better than forcloser.

Las Vegas, Nevada
comeon guys standard rules. This is a dicker. Your response to "you will owe us money" is "OK forelclose or in lieu of."

If you don't know how to deal with it hire somebody. A number of the RE brokers arround town have operations that specialize in this.

Drop me a DM and I will refer you to our operation which is a reasonably good one if you are not already behind. . Note for the record that I could get paid for the referral if they pull it off.

Not holding my breath though. The majority of the time foreclosure is best for the seller.
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Old 08-13-2008, 09:07 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,674 times
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Quote:
Originally Posted by TristansMommy View Post
AND.. if a bank forgives you the difference.. you do not have to report it as income according to anew law Bush passed early this year forgiving the forgiven debt taxable.
you still have to report it, you are just not taxed on it...for now. you will still probably get a 1099 for it even.

i also fail to see how short sale is better. maybe you dont have much experience with this. to give you an idea. 80% of all short sale offers are turned down and the 20% that do get though still take 45-60 days on average to process and close.

a lot can happen in that time. if you think buying a house and obtaining a mortgage was difficult before. try anticipating locking loans now. short sales are a nightmare.
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