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Those are the strategic defaulters. They aren't unable to pay, just unwilling. The majority of sales in my area are these, rich doctors and lawyers who simply don't think they should continue to pay that $2m mortgage for a place now only worth $1m. And by allowing short sales we are giving them the perfect getout clause.
If you won't let us sell at a loss and move on, then let us sue the seller who OVER CHARGED us for our homes in the first place. We trust Realtors to know the proper price to pay for a home.
You want the bank to be made whole.
You want the seller to be made whole.
You want the Realtor to be made whole.
You want the mortgage investors to be made whole.
The only one left holding the bag is the buyer who needed a home in an artifically inflated market.
Your neighbor should pay the HOA first as it is much easier for the HOA to go after you than the banks, many of whom no longer hold the mortgage, just service it.
I know you are not thrilled with people such as myself but financially it just makes sense for people like myself to look at the short-sale, modification strategy. I can always find another place to live, but do not want to be stuck with an underwater property for the next decade.
I am in discussions with my attorney and investment advisor regarding the ramifications of doing a short-sale. Our strategy will be to drag it out and possibly look at a modification down the road. We expect the process to take 2-3 years. My credit will drop from around 800 but I should save $46K per year.
Does anyone know how long it takes for a short sale to affect credit cards you currently have in place? I don't need the credit cards but I do like the 30 days of float.
I am not looking to buy any real estate in my name until at least 2015, so even with a short-sale on my credit I am advised by my attorney that I will be okay.
My biggest concern is now making sure the 2 banks I have mortgages with do not go after my liquid assets. Again, I have been advised that all my retirement funds are okay and even stocks/bonds so long as they are not held at the institutions holding my mortgages. Does anyone know if the banks are able to go after assets held in other financial institutions?
If you won't let us sell at a loss and move on, then let us sue the seller who OVER CHARGED us for our homes in the first place. We trust Realtors to know the proper price to pay for a home.
You want the bank to be made whole.
You want the seller to be made whole.
You want the Realtor to be made whole.
You want the mortgage investors to be made whole.
The only one left holding the bag is the buyer who needed a home in an artifically inflated market.
Did you yourself sell a property before buying the one you have now? Would you be willing to refund the buyer of that property? If your property was now worth twice what you paid would you be willing to give the previous owner an extra payment? It works both ways.
At the time you bought you obviously thought it was worth what you paid. If you didn't do any research independent of what your realtor told you then you deserve all you get anyway.
Your neighbor should pay the HOA first as it is much easier for the HOA to go after you than the banks, many of whom no longer hold the mortgage, just service it.
I know you are not thrilled with people such as myself but financially it just makes sense for people like myself to look at the short-sale, modification strategy. I can always find another place to live, but do not want to be stuck with an underwater property for the next decade.
I am in discussions with my attorney and investment advisor regarding the ramifications of doing a short-sale. Our strategy will be to drag it out and possibly look at a modification down the road. We expect the process to take 2-3 years. My credit will drop from around 800 but I should save $46K per year.
Does anyone know how long it takes for a short sale to affect credit cards you currently have in place? I don't need the credit cards but I do like the 30 days of float.
I am not looking to buy any real estate in my name until at least 2015, so even with a short-sale on my credit I am advised by my attorney that I will be okay.
My biggest concern is now making sure the 2 banks I have mortgages with do not go after my liquid assets. Again, I have been advised that all my retirement funds are okay and even stocks/bonds so long as they are not held at the institutions holding my mortgages. Does anyone know if the banks are able to go after assets held in other financial institutions?
You need to be very careful extending your short sale strategy pass Dec 31th 2012. That's when the 2007 Mortgage Forgiveness Act expires. So if you plan on dragging this out more than 18 months, you may be dealing with the IRS for taxes owed on the shorted amount by the Banks. The bank will send you a 1099c.
The game is over for short sellers at the end of 2012. Once the IRS gets involved, it's over and I doubt Congress will extend this horrible law which has worsen the housing market by creating this niche market of strategic defaulters.
My cousin down in S. Florida is strategically defaulting. But she pays her HOA also and not the mortgage. Because the HOAs in Florida are like nazis in gated communities. They will go after you.
As for credit cards. Just continue paying your credit cards and don't be late. You will be fine. We have a personal banker at Wells Fargo (they consider su high net worth but seriously I don't feel rich). But anyways, our banker says WFC knows who are the strategic defaulters, as long as you pay on time, they won't do anything. They won't even cut your credit limit. WFC actually wants strategic defaulters as clients as long as they pay on time and have given out credit cards with annual fees to strategic defaulters with poor credit (sole reason is housing default).
The 12/31/2012 expiration does not affect me. My primary residence and 2nd residence have 5 years of accumulated tax losses, which I show on my tax returns. If loans are forgiven and I get hit with a tax liability, I will simply use past losses to offset any gains.
Also, my attorney coordinates with the IRS regarding the tax liability and has been successful in the past eliminating any tax liabilities for those who short-sale.
I am doing my research before I start the process but am thinking of stop making my payments in either June or July, maybe later as there is no rush but I do get annoyed with funding $1000 of losses each month on the properties.
The 12/31/2012 expiration does not affect me. My primary residence and 2nd residence have 5 years of accumulated tax losses, which I show on my tax returns. If loans are forgiven and I get hit with a tax liability, I will simply use past losses to offset any gains.
Also, my attorney coordinates with the IRS regarding the tax liability and has been successful in the past eliminating any tax liabilities for those who short-sale.
I am doing my research before I start the process but am thinking of stop making my payments in either June or July, maybe later as there is no rush but I do get annoyed with funding $1000 of losses each month on the properties.
1. Regarding your attorney getting tax liabilities waived for short sales (was this done before the 2007 law?). It's a different ball game after 12/31/2012.
While some banks will waived tax sale liabilities even for secondary and investment properties, this is going to be the big question mark after the law expires in 18 months. You gotta remember, short sales were almost unheard of until after that tax law was past because no one wanted to deal with the IRS with the tax liability. Unless they declared BK. And in that case, people just went into foreclosure because they had no assets. But people with assets (or hiding assets) are trying to pursue the short sale course because of this temporary forgiveness act.
2. You cannot write off losses from a primary or secondary home sale. Unless you converted it to a rental property (and you have to adjust the cost-basis after the conversion). I did that when I converted my place to a rental in 2007 and sold it in 2009. I wrote off $130K loss (yes I lost $130K from the sale of the home). But I have Schedule E to show I rented out the property and also did not have a homestead exemption either.
If you won't let us sell at a loss and move on, then let us sue the seller who OVER CHARGED us for our homes in the first place. We trust Realtors to know the proper price to pay for a home.
You want the bank to be made whole.
You want the seller to be made whole.
You want the Realtor to be made whole.
You want the mortgage investors to be made whole.
The only one left holding the bag is the buyer who needed a home in an artifically inflated market.
What about the guy holding a gun to the buyer's head and forced them to sign the papers?
Short sales are the invention of real estate brokers (the ones that caused the real estate crisis); and the sole reason why you should do a short sale is to get a commission for him.
The popularity of short sales in recent years has exploded.
The reason is simple. Mortgage and forgiveness act of 2007.
With no Mortgage and Forgivness act in place, close to zero short sales would take place.
Here are the supporters of this law,
"National Association of Realtors, Mortgage Bankers Association and National Association of Homebuilders.". It was sponspored by Charles Rangel of New York and supported by most members of Congress.
Looking back on the law. The intentions meant well. Government didn't want to "kick" people while they were down.
But a hugh consequence of the law pushed short sales to be in vogue flooding the market with even more distressed properties and letting many homeowners off the hook with potentially very little damage to their credit and virtually no co sequence (especially in non recourse states) where the short seller could buy anothe those within. 2-3 years again.
Like I said. If this law doesn't get renewed. Short sales will become a thing of the past. No one will short sale their home at threat of IRS tax liability. Just easily just to go into foreclosure and declare BK.
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