Loan Mods/Short Sales
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Yes loan mods are great.... if you are not upside down.
If you are upside down on your home like many are, meaning you owe more than it is worth, then loan mods are one of the greatest evils of our time! (See below for a legitimate explantion of that statement)
If you are break even or with some equity keep trying for that loan mod it may work out depending on your particular circumstance. Give me a call I will try and guide/help you (for free) I am not soliciting business here only providing (free) options.
Now about that evil. How about being enslaved to a debt you cannot possibly pay off in 30 years?
You presumably bought the home thinking it will go up, it hasn’t; now you have to pay say 30K per year on something that is mostly interest. Consider this: Is that 30K going into your pocket? No, it is basically rent to the bank as you only pay significant principle starting around 15 years into the loan.
1 Persons Loan Mod Experience
Below is an email from a woman I advised on a loan mod. She was answering a query on a blogsite.
As a courtesy to the Realtor who took time to respond at my request to the original question, I'd like to share his response to Anilas post. Personally, I've referred him to no less than a half-dozen of my friends and they've been grateful for a professional Realtor's perspective - one who has substantial experience with all the options, a multitude of banking and lending relationships, as well as knowledge of how to navigate each of the options and processes. Unlike Anila's assertion, he hasn't solicited my friends, but has given them his perspective and as I said, he helped me decide to go for a loan mod, what to say and NOT to say during the interview process, all at no cost so I am happy.
I know he's also worked with a lot of people who went through the loan mod process and didn't get it - so then what are they to do? Some lost their homes as they didn't listen to what they didn't want him to tell them and they got foreclosed upon and others went thru the short sale process. Some started the short sale process too late because the house didn't sell fast enough and they got foreclosed on anyway.
From what I've seen and personally experienced when I went thru this whole thing last year, I absolutely recommend that a professional Realtor's perspective should be considered early in the evaluation process and as part of the loan mod process, before you lose your options by hanging in there, paying your mortgage that you can't afford while hoping you'll get that loan mod. Then, if you get turned down, unless you know your options on short selling, you could end up in a worse position of foreclosure.
Good luck to anyone in this situation. I'm glad it's behind me! Anyway, here's Jonathan's reply:
- It is immoral to leave someone with a debt burden that eats up their too short years on this earth
- Sometimes keeping a home at any price isn't a good idea
- There definitely are some cases where keeping a home and doing a loan mod is good for the owner but you need to do a balanced, honest and fair analysis in order to arrive at an impartial and correct decision for each individual case
- Credit report impact is minimal compared to foreclosure and one can buy a home in 2 years
- A good person gives all the facts and options and then let's people decide for themselves what is best
(Dear friend if you are ready for this conversation give me a call. It’s merely 2 people talking not a dramatic event… Know your options)
Short Sales
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Questions Answered
"Jonathan, do I have to pay taxes on the Short Sale?"
NO, Why? Because you don't profit from the short sale therefore it is not income. Before Bush left office this law was implemented because nobody in their right mind would do a short sale if they had to pay taxes on it.
"Jonathan, will this hurt my credit?"
Yes, but only a little. Not allot. You can buy a home again in 2 years and prices will still be incredibly low. Right now you’re upside down home is worth way less than what it used to be worth. This may be a once in a lifetime opportunity to get rid of an obligation that could plague you for 20-30 years!
"Jonathan, what happens if I decide not to Short Sell and the bank forecloses on me?"
My dear friend, please don't let that happen. It's 7 years bad credit and it is totally unnecessary as you can stay in your home while it is being marketed via the Short Sale process.
"Jonathan, is the market getting better?"
Yes, for Buyers. No for Sellers... with one exception...
Short Sellers. Why? Because who ever heard of getting rid of say a 1/2 million dollars debt, renting for 2 years for less than you pay on your mortgage now (and in a better neighborhood) and then buying at low prices without paying one penny to sell your home?
"Jonathan, what can go wrong?"
Nothing really. The bank can say no we will not accept the offer on your home but that is the same position you are in now. (It is a free service to the seller..short selling a home)
No Pressure No Fees No costs
Just a Confidential phone call
I am your friend/advocate not the banks
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Unload the Overpriced Home you Own
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Get the Debt wiped out (No further responsibility)
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Walk Away From the Payments,Taxes, Insurance etc
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Have Lower Taxes, Lower Payments, Lower Insurance
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Not Have your Credit Ruined by Foreclosure
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Get Permanent Relief from your Mortgage Payments
This is not just a bunch of empty words.
Top Seven Reasons to do a Short Sale
1. You pay no out of pocket expenses. It is FREE! to a seller. All short sales are sold as-is, meaning you won't have to bother spending time and money on tedious home repairs. Your lender also pays for all commissions and services on both sides of the transaction, giving you the least hassle possible in moving on to your next home.
2. Your credit damage is minimized. A short sale will have a recoverable impact of 80-100 points on one’s credit, compared to the devastating effect of 250-350 points a foreclosure has on a credit score.
3. You can buy another home in just two years. Fannie Mae Announcement 8-16 recently set the standard that homeowners who choose to short sale only have to wait two years before buying another home. Foreclose prevents you from owning a home for about 5-7 years.
4. You have an assured sense of relief. Short sales in lieu of loan modifications give homeowners a firm new start. The Department of the Treasury just released a study revealing that 55% of homeowners redefault again within six months of receiving a loan modification.
5. You save money and pay less taxes. The Mortgage Forgiveness Debt Relief Act of 2007 allows short sale homeowners to not be taxed on the difference between their loan amount and the short sale price. With a foreclosure, you'll receive a 1099 for a home you don't even own.
6. You have a dignified solution to a difficult problem. A short sale allows you to stay in your home during the negotiation period. A foreclosure can become an embarassing situation as a bank representative comes by to lock up the doors and windows, change the locks, and put up "bank owned" signs on your property while the local Sheriff is contacted to have you forcibly evicted.
7. You'll have an easier time finding a nicer place to rent. If you chose to rent, a foreclosure and/or eviction are red flags for landlords that will make it very difficult for you to find a place to live in the future. However, while a short sale is being negotiated, homeowners have many more options and can easily select a new place to live at their leisure.
100% Confidential
Handled with the utmost discretion
I respect your dignity.
I respect your unique situation
I am respectful of your privacy
Private and Confidential ...You have more Options than you may think
(It's a conversation not a decision)
714 815-4540
