METRO DETROIT Short Sale Frequently Asked Questions

GEORGE Helps Metro Detroit Area Homeowners Avoid Foreclosure! SAVE YOUR CREDIT! George's "SOLD in 2 Weeks" Program Helps Owners Minimize the Credit Damage!Pay NO commission, NO closing costs, No fees! SAVE YOUR CREDIT!  STOP the Foreclosure by getting offers in 2 WEEKS! Get up to $3,000 CASH (was $1,500)  back incentives for doing a Short Sale!

Call George to see if you Qualify!

ATTENTION HOME OWNERS!

LOST YOUR JOB? TRANSFER? DIVORCE? LOWERED INCOME?GEORGE Helps Metro Detroit Area Homeowners to AVOID Foreclosure! SAVE YOUR CREDIT! No FEE Loan Modification at Lower Affordable Monthly Payments! If you need to do a Short Sale, Pay NO Commission, NO Closing costs!

STOP the Foreclosure by getting offers in 2 WEEKS! George's SOLD in 2 Weeks Program Helps Minimize the Credit Damage! Get up to $3,000 (was $1,500) CASH back incentives for doing a Short Sale!

AVOID DEFICIENCY JUDGEMENTS  BANKS CAN FILE AGAINST YOU FOR THE UNPAID BALANCE AFTER THE FORECLOSURE SALE!

Are deficiency judgments permitted in Michigan?

Yes. Foreclosure is the sole remedy against a property unless there is a separate legal document which obligates a borrower to a specific amount of money. This is usually in the form of anote andguaranty. Adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. The borrower can claim that the foreclosure sale was not forfair market value of the property as adefense.

LEARN MORE AT http://www.foreclosure.com/statelaw_MI.html

See Below Recent TV NEWS and articles on the MORTGAGE CRISIS. Send it to your friends.

Clinck on this LINK below:

Your Graceful Exit

60 Minutes on walking away

May 9, 2010 21:28 EDT

The weekly news magazine doesn’t break any new ground, but publicity like this may encourage many more to walk away. If this becomes common behavior among underwater borrowers, it could lead to a deflationary spiral. That would be very bad news for banks and, ultimately, the paper wealthy.

http://blogs.reuters.com/rolfe-winkler/2010/05/10/60-minutes-on-walking-away/

Mortgage rescue: Credit score killer

Debate Grows As Housing Crisis Continues

You lost your house - but you still have to pay! BANKS are going after the Foreclosed
Owners for the UNPAID Mortgage Balance!

NEW YORK (CNNMoney.com) -February 3, 2010: 8:18 AM ET
- As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right? Wrong!
Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.

It can even happen to people who got their bank to approve them selling their home for less than it is worth.

Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.

http://money.cnn.com/2010/02/03/real_estate/foreclosure_deficiency_judgement/

Walk away from your mortgage the SMART WAY- do a Short Sale

January 09, 2010 — With banks refusing to help homeowners with their underwater mortgages, a New York Times story advocates simply walking away.
http://www.youtube.com/watch?v=VBkwhl1Y0q0&feature=player_embedded#!

• 
  IF YOU DO A SHORT SALE with George (George can negotiate NO DEFICIENCY JUDGEMENT) YOU CAN RENT FOR 6 months, 2 years PUT MONEY ASIDE IN SAVINGS FOR DOWN PAYMENT AND BUY AT DISCOUNT PRICES with George in 6 months, 2 years from the short sale.
• Call (800) 441-0648 ext 5001 to see if you qualify!

See Below Recent TV NEWS and articles on the MORTGAGE CRISIS. Send it to your friends.

STRATEGIC DEFAULTS

This news comes on the heels of Morgan Stanley walking away from its commercial mortgage commitments on five buildings out in San Francisco.

Apparently it's just good business.

http://www.cnbc.com/id/35063257

No Worries About "Morality" in Biggest Real-Estate Default in History

http://finance.yahoo.com/tech-ticker/no-worries-about-%22morality%22-in-biggest-real-estate-default-in-history-411839.html?tickers=dia,spy,xlf,len,kbh,blk

Busch: US Housing-Walk Away?

Behavioral scientists are having a field day with this behavior and one professor states these borrowers are suffering from "norm asymmetry.

http://www.cnbc.com/id/35059205/

Strategic Defaults and the Foreclosure Crisis - Yahoo! Finance

(http://finance.yahoo.com/news/Strategic-Defaults-and-the-usnews-2190373684.html?x=0&mod=loans)

*****

LOWER YOUR CURRENT MORTGAGE PAYMENTS!

*Help to keep your Home IT'S FREE!

*FREE Affordable LOAN MODIFCATION Advice and Guidance till you Get the Lower Loan Approved!

BEWARE OF FORECLOSURE RESCUE SCAMS!!!!!!

*BEWARE of any PERSON or ORGANIZATION who CHARGE for a LOAN MODIFICATION or OFFER to -SAVE- YOUR HOME if you sign or transfer over the DEED. DO NOT PAY - WALK AWAY!!

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With homeowners defaulting on their mortgages at a record pace, many people are practically begging their lenders for some form of relief or assistance in order to prevent themselves from ending up on the street. While it is certainly disconcerting to receive collection letters and threats of impending foreclosure from a lender, those who are falling deeper into debt and enduring difficulty making their monthly mortgage payments need not despair. The “short sale” is one alternative worth considering as a viable means for resolving your debt with the lender and dealing with a home that is no longer affordable. Here are some basics you need to know before starting the short sale process.

What is a Short Sale?

A “short sale” occurs when the net proceeds from the sale of property is not sufficient to satisfy the outstanding mortgages on the property, and the seller does not have the financial ability to make up the difference. The lender is asked to take less than the full amount owed in order for the sale to be completed

What Causes A Short Sale?

Sometimes a short sale is brought about because the homeowner borrowed more than he/she could afford to pay back and miscalculated his/her financial status. Often, the short sale arises because of an unforeseen change in the homeowner’s life, such as a long-term illness, disability, divorce or loss of employment, which has dramatically affected the person’s income such that the mortgage payments are no longer affordable.

Why is the short sale a viable option for the seller?

A foreclosure can have a devastating impact on someone’s credit report that has a lasting effect for years to come. A short sale is typically reported on a credit report as a debt that is “settled for an amount less than what is due”. While this will cause a dip in credit score, it will be nowhere near as harsh as the reporting of a foreclosure.

Why would a lender agree to a short sale?

The answer is very simple: Lenders do not want to own houses. Lenders are in the business of loaning money, not in the business of stockpiling real estate. There have been numerous reports that banks can face fees of up to $50,000.00-$60,000.00 in actually foreclosing on a property. From a business standpoint, the lender will make out better if the property is put on the market and given an opportunity to attract a buyer through private sale.

What is the difference between a Foreclosure and a Short Sale?

A Foreclosure in Michigan usually occurs in the form of a Sheriff's Sale (Trustee’s Sale). Because we have Deeds of Trust instead of Mortgages, when a Buyer borrows funds from a Lender, they agree to let the Lender SELL the home if they default. The party entrusted with this sale is a Trustee. When a property is taken back due to default, the Lender attempts to sell the property at a Trustee’s Sale to wholesale property investor/buyers. If the property does not sell, the Lender now becomes owner of the property and must attempt to sell it themselves as a Bank Owned (REO) property on the open market. The lender has the right to pursue former owner for the UNPAID BALANCE after the foreclosure by filing a "deficiency judgement".

A Short Sale bypasses this step by allowing the Owner of the property to sell the property BEFORE the Sheriff's Sale (Trustee’s Sale) takes place. The sale is contingent on the Lender’s approval of the terms and amount of the sale. Because the net dollar amount to the Lender in a Short Sale is usually higher than the net amount in an REO sale, they are usually more inclined to accept the offer and let the sale take place. George can negotiate NO DEFICIENCY JUDGEMENTS for the sellers.

How does the short sale process work?

Most lenders have a short sale package containing documents that the seller must submit in order to have the short sale approved. Such documents include: hardship letter from seller/borrower explaining why the short sale is necessary, seller’s financial statement, two most recent pay stubs, two most recent bank statements, two most recent tax returns, copy of an Agreement of Sale with buyer, copy of proposed settlement statement (HUD-1) demonstrating net monies to the lender. Once the package is submitted to the lender, a negotiator is assigned to the file who handles the short sale on behalf of the lender through closing.

How long does this take?

The process can take 60-120 days to get a buyer, get approval and get it closed. You can still reside in the property until it closes escrow, and in some cases even rent the home back from the Buyer.

Will the Bank seek to recover the amount of loss?

The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. In many instances this is not allowed on the 1st position loan for a primary residence. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, you should talk with a real estate lawyer. Ultimately, your agreement to do a Short Sale is between you and your bank. They will disclose if there is any liability to you. OUR attorneys from the MEDIATION GROUP can advise YOU.

Are there tax liabilities?

• Some banks will issue you a 1099C Cancellation of Debt tax statement according to bank policy and/or current law showing their loss as your gain. In other words, you may be liable for taxes as if you earned the amount the bank lost. In many cases there is already financial hardship and as a result there is little if any tax impact. The 2007 Mortgage Forgiveness Debt Relief Act (Public Law 110-142, HR 3648), has amended the tax laws to allow borrowers negotiating the sale of their primary residence to avoid having to declare this debt as income (limited to debts of $2 million cap) This forgiveness of debt stipulation does not apply to rental properties or other non-primary residences that a lender may hold as collateral.

  Under some circumstances the debt will not be show as taxable under fair value accounting determined that the value of the debt is greater than the fair market value of the asset in question.

  **we are not offering legal advice consult with your tax attorney or accountant for more information

  New regulations in 2010 will remove homeowners liability if they have been approved for a short sale. You will want to check with a tax accountant to determine how that will impact your tax return/payment. OUR attorneys from the MEDIATION GROUP can advise YOU.

Does the Seller need to be behind in payments to do a Short Sale?

• Because Short Sale considerations are always as a result of some kind of hardship, Lenders expect that the hardship results in an inability to pay the Lender because they can’t afford to.
• IF the Borrower is making regular monthly payments, it defeats logic that there is a hardship.
• The exceptions to this are- NO NEED TO BE LATE ON PAYMENTS-  Job Loss, Transfer, Divorce, Death, Incarceration, Deportation or some other event that can’t be remedied and is date certain to take place.