Frequently Asked Questions about Short Sales

Who can negotiate a Short Sale?

According to a bill passed in the 2009 during a legislative session in Tallahassee Florida, only licensed mortgage loan originators and licensed attorneys are allowed to negotiate the terms or conditions of an existing mortgage loan on behalf of a borrower.

Are there any tax implications when I short sell my home?

In most cases for primary residences up through the end of 2012 the federal government has waived the phantom income that occurs from the 1099 sent to the homeowner after the transaction has concluded. The law waiving the tax liability for these short sale events is scheduled to expire at the end of 2012. However, it is expected to be renewed by the congress prior to its expiration as tens of millions of homeowners have yet to short sale their homes.

If I am in bankruptcy will that effect me short selling my home?

Absolutely, we highly recommend, that if possible, to resist the temptation to file for bankruptcy until you have successfully sold your property. If you are in the middle of your bankruptcy it is important to understand that once you discharge your mortgage(s) you still own the home and the liability for homeowners insurance , property taxes and legal fees to foreclose continue to accrue.

Once the foreclosure process begins, which takes place after the conclusion of the bankruptcy, you still have the opportunity to attempt a short sale to avoid the pursuit from the note holder for the balance of accumulated expenses incurred by the note owner after the discharge of the bankruptcy.

Why does it take so long to close a short sale?

A lawyer assisted short sale can cut months off the time it takes to process a short sale. Most real estate professionals resist the assistance of a highly trained negotiator also known as an attorney. The note owners use law firms to assist in the negotiation process and so should the seller.

I am concerned about my credit, how will a short sale affect my credit score?

The most important issue to understand during this process is to absolutely avoid foreclosure. By all measure of credit damaging events a foreclosure is by far the worst event that can occur from a credit grantors perspective. Yes worse than a bankruptcy! Typically we have found that if the only trade or creditor that has a placed a negative item on a borrower’s credit file is the mortgage(s), within a year of the short sale closing, the borrower’s credit score usually returns back to the score prior to the 1st late payment appearing on the credit file.

I have two loans can I still short sell my home?

Yes, we work with both note owners and their servicing agents simultaneously to achieve as best an outcome for both parties as well as the homeowner. We have found after five years of negotiating short sales, every 2nd mortgage note owner has agreed to the terms that the 1st note owner has presented.