Think you might qualify? Would you like to discuss other mortgages and options for your Short Sale in San Diego.
Call me TODAY to find out more about a HAFA Short Sale.
Serving All San Diego County Communities
What is a Short Sale
A short sale is when a homeowner owes more on his or her mortgage then the current market value of the home. The bank will have to approve the difference in the sale price to what the borrower owns.
Where to start if you are considering a Short Sale
- Hire a Realtor. Call a local Real Estate Agent that is familiar with the area and has successfully closed short sales before. If you hire Jaz Cook as your Realtor, to help you through the Short Sale Process, I will have you sign a Authorization Form and the professional negotiator team who will assist in the process.
- Listing Consultation Completely Private and Strictly Confidential questions and answers meeting in the privacy of your own home to explore ALL Options inc Short Sale.
- Complete Listing Package including the Short Sale package for your lender or lenders if you have more then one mortgage on the property.
- Jaz will market your home to find a qualified buyer that is willing to patiently wait until we receive short sale approval from your lender(s).
- Once an offer is receive and accepted by you, we will submit the offer along with the entire short sale package to your lender. The actual short sale approval can take as little as a 2 – 3 weeks or as much as 2-6 months, depending on your situation and the bank or banks involved.
- Short Sale Approval & Settlement within 30 – 45 days from receiving the approval.
In a Short Sale transaction the seller does not have to pay the Realtor commissions or any of the closing cost, the bank will cover all of these costs. The banks might not be covering taxes, past due HOA fees or any outstanding judgments.
You should also consult a local CPA or tax attorney to discuss any possible tax implication. If you like we can provide you few names.
If you are considering a Short Sale or would like to explore ALL your options NOW is the time to CALL Jaz Cook:
Serving All San Diego County Communities.
Feeling like there is no other option but foreclosure can be an overwhelming experience. Know that you are not alone. Thousands of homeowners in the United States are facing the same challenges as you every single day. Now more than ever before there are solutions.
You need help, guidance, and someone who understands the difficult choices you are facing about your home, your family, and your life. Quite often a homeowner facing a foreclosure thinks they have to go through the process alone, forced into a daunting situation caused by unforeseen circumstances beyond their control.
Facing damage to your credit, and the possibility of not being able to purchase another home for 10 years can be a tough future to face, but by tapping into the expertise of a knowledgeable real estate agent, there are options available for you and you've come to the right place.
We provide you with information about how to avoid a foreclosure, explain the effects it can have on you and your family, and offer other options that may be available to you. This includes a short sale, and we can help you determine if you qualify.
Please know that all communication will be strictly confidential.
Contact Jaz Cook 619 985 9058
If you are one of the thousands of home owners thinking of doing a Short Sale, you need to get going right now so you can close this year.
Why? You may ask, because through Dec. 31, 2012, the federal government forgives any tax liability associated with forgiveness of a mortgage loan often times associated with a short sale.
If a bank writes off debt in a short sale, it’s a “taxable event,” and the lender tells the Internal Revenue Service about the deal by submitting a “Form 1099-C, Cancellation of Debt” at the end of the year. Home sellers must acknowledge the amount when they fill out their federal taxes.
The December 31, 2012 deadline can always be extended by the federal government. In general many homeowners believe the government will do exactly that.
However, as evidenced by the First Time Home Buyer Credit expiration in 2010, you can’t always count on the government to extend the safety net and give needy home owners a bailout.
The government generally considers forgiven debt to be income. If a seller has signed legal loan papers to take out a $300,000 mortgage and the lender accepts $200,000 in a short sale, for example, the seller received the equivalent of $100,000 in free money by government estimates. As a result, the IRS taxes it. For tax year 2012, however, the government still forgives the debt; in 2013, it might not
The tax amount can be significant. On a debt of $100,000, a short-sale seller in the 25 percent tax bracket could end up owing $25,000 in income taxes.
Therefore, since short sales can take months and some even fall through, homeowners considering doing a short sale may want to find a good realtor of attorney and start the ball rolling sooner rather than later.
Right now is the time to make the hard decision: Are you going to walk away from your underwater home? Because if you procrastinate and the clock run out you may owe large federal income taxes in 2013.
As previously stated, the Federal Government is giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.
However, on January 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.
A word of caution to those home owners deciding to take the plunge… make sure the agent or attorney representing you get a letter from the bank/lender acknowledging that the short fall amount of the mortgage is forgiven. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before December 31, 2012. Easton L Lawrence.
Helping San Diego homeowners use a Short Sale Program to avoid home foreclosure in Greater San Diego area.
The Complete Short Sale Process
How a Short Sale is Handled from Listing to Bank Approval
The short sale process is still a mystery to many people, even after all these years. Lots of buyer's agents are confused; puzzled buyers are looking for direction, and not every short sale listing agent knows how to do a short sale.
The Basics of a Short Sale
Banks grant short sales for 2 reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.
A few examples of a hardship are:
- Unemployment / reduced income
- Medical emergency
- Job transfer out of town
The seller will need to prepare a financial package for submission to the short sale bank. The seller's short sale package will most likely consist of:
- Letter of authorization, which lets your agent speak to the bank.
- HUD-1 or preliminary net sheet
- Completed financial statement
- Seller's hardship letter
- 2 years of tax returns
- 2 years of W-2s
- Recent payroll stubs
- Last 2 months of bank statements
- Comparative market analysis or list of recent comparable sales
Writing the Short Sale Offer and Submitting to the Bank
Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.
After the seller accepts the offer, the listing agent will send the following items to the bank:
- Listing agreement
- Executed purchase offer
- Buyer's preapproval letter and copy of earnest money check
- Seller's short sale package
If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package.
The Short Sale Process at the Bank
Following is a typical short sale process at the bank:
- Bank acknowledges receipt of the file. .
- A negotiator is assigned.
- A BPO is ordered.
- A second negotiator may be assigned.
- The file is sent for review or to the PSA.
- The bank may then request that all parties sign an Arm's-Length Affidavit.
- The bank issues a short sale approval letter.
Some short sales get approval in 3 to 8 weeks. Others take 90 to 120 days, on average. It depends which bank you are dealing with and your short sale agent that is handling the file.
Recently the Federal Housing Finance Agency announced that both Fannie Mae and Freddie Mac are issuing new guidelines for mortgage servicers that will essentially consolidate all short sale programs into one streamlined program.
These updated short sale program rules will allow lenders to qualify someone for a short sale, and homeowners will more easily be able to tell if they are eligible for a short sale.
New short sale guideline highlights
Under the new guidelines going into effect Nov. 1: 2012
- Homeowners with a mortgage backed by Fannie Mae or Freddie Mac will be able to do a short sale even if they are current on their mortgage if they have an eligible hardship such as
the death of a borrower or co-borrower, divorce or legal separation, illness or disability, or a distant employment transfer.
- Homeowners will be able to make a financial contribution at closing in exchange for the lender not pursuing them for a deficiency judgment later (assuming the homeowner has sufficient income and/or assets).
- Military personnel who are being relocated will be automatically eligible for a short sale and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.
- Subordinate-lien payments will be limited to $6,000. Previously lenders would often attempt to negotiate a higher payment from the homeowner.
- In certain circumstances, homeowners will be eligible to receive up to $3,000 in relocation assistance.
Short Sale Benefits to Foreclosure
Good Reasons for Selling on a Short Sale vs Foreclosure
A short sale might be better than a foreclosure, before proceeding seek legal and tax advice.
Will Short sale protect your credit? It is partially true. Your credit rating will tank if you fall behind on your mortgage payments. there is one exception though.
If you have no 60-day-plus late pays on your credit report, Fannie Mae may still offer you a loan to buy another home. However, most people who sell on a short sale are in default past 60 days, so this exception does not apply to them.
A short sale could ruin your rating. It might not happen right away, but sooner or later, unless the bank has specifically agreed not to report the shortage, the bank may report it as a Score Factor Code 22. That score factor relates to delinquencies, derogatory records and collections.
Benefits for Foreclosure
Although going through foreclosure is often painful and embarrassing for sellers, there are benefits:
- No mortgage payments to make.
- Foreclosure proceedings could take few months.
- You can still live in your home until the foreclosure is final.
- Banks sometimes give cash for keys after the public sale.
Drawbacks to Foreclosure
Fond memories are made in a home, and losing it can shatter future dreams. Here are other drawback to foreclosure:
- The right of home ownership is striped away.
- Homeowners return to the rental market as a renter.
- The bank may post a Notice of Public Sale on your front door.
- Your credit takes a nose dive, and a foreclosure will remain on your credit report for 10 years.
- Under Fannie Mae guidelines, without extenuating circumstances, you will not be eligible to buy another home for 7 years.
Benefits for Short Sale
What do you get out of a short sale?
- Retain some dignity in knowing that you sold your home.
- You won't suffer the social stigma of the "F" word: foreclosure.
- No mortgage payments to make, unless you choose to make them.
- You can meet the new owners.
- You will be eligible, under Fannie Mae guidelines, to buy another home in 2 years instead of 5 to 7 years.
- If your credit report does not reflect a 60-day+ late pay, under Fannie Mae guidelines, you will be eligible to buy another home immediately.
Drawbacks to a Short Sale
You may experience some of the same drawbacks as a foreclosure, but they might seem less intense.
- Waiting for the bank to respond to an offer is frustrating unless you have agent that can get the job done.
- The bank will want to examine personal records such as tax returns, bank accounts, assets and liabilities and a hardship letter from you.
- Bank may or may not accept a short sale offer
- The derogatory credit will remain on your credit report for 7 long years.
For many home sellers, though, the chance to own another home in two years is the real motivation to do a short sale. Good credit behavior can supplant bad credit after two years, even though the derogatory will remain.
Chase on line application for short sale, click here:
Homeowners of underwater properties have a reason to rejoice -
FHFA Releases New Short Sale Guidance. AUG 2012
The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac-the government-sponsored enterprises (GSEs)-are issuing new, clear guidelines to their mortgage servicers that will align and consolidate existing short sales programs into one standard short sale program.
The new guidelines, which go into effect Nov. 1, 2012, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship.
Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.
“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”
The FHFA's new guidelines:
Offer a streamlined short sale approach for borrowers most in need:
To move short sales forward expeditiously for those borrowers who have missed several mortgage payments, have low credit scores, and serious financial hardships the documentation required to demonstrate need has been reduced or eliminated.
Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales: Common reasons for borrower hardship are death, divorce, disability, and distant employment transfer or relocation.
With the program changes, servicers will be permitted to process short sales for borrowers with these hardships without any additional approval from the GSEs, even if the borrowers are current on their mortgage payments.
Borrowers will now qualify for a short sale if they need to relocate more than 50 miles from their home for a job transfer or new employment opportunity.
Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes.
Servicers will evaluate borrowers for additional capacity to cover the shortfall between the outstanding loan balance and the property sales price as part of approving the short sale.
Offer special treatment for military personnel with Permanent Change of Station (PCS) orders:
Service members who are being relocated will be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.
Consolidate existing short sales programs into a single uniform program:
Servicers will have more clear and consistent guidelines making it easier to process and execute short sales.
Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending:
The new guidance will clarify when a borrower must submit their application and a sales offer to be considered for a short sale, so that last minute communications and negotiations are handled in a uniform and fair manner.
Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale: Previously, second lien holders could slow down the short sale process by negotiating for higher amounts.
This alignment comes as part of a broader FHFA effort, the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners.
FHFA announced guidelines in June that establish strict time lines for servicers considering short sales.
Servicers are required to review and respond to short sales within 30 days of receipt of a short sale offer; they must provide weekly status updates to the borrower if the offer is still under review after 30 days, and they must make and communicate final decisions to the borrower within 60 days of receipt of the offer and complete borrower response package.
These borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a short sale.
California Homeowner Bill of Rights Becomes Law July 2012
"Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner," Brown said..... listen to this video.
Jaz Cook - Chase Bank Priority Partner
Posted by Jaz Cook -
I am really excited to be approved as a Chase Bank Priority Partner. This is a new program in Southern California. Only agents that are most experienced and have been qualified in Short Sales Process were selected.
I now have direct contact with Chase Short Sale Department to expedite your transaction. The Process is Streamlined for Chase Priority Partners. No more waiting for 6 months to a year for short sale approvals. There is light at the end of the tunnel, finally!
This program will give Sellers the ability to exit their home with grace.
HAFA short sale program will accept eligible borrowers until December 31, 2012. Contact me for more information on why this is an important date in your financial decision.
If you or anyone you know needs help with a Purchase loan or have a Refinance question, I would recommend my Chase Loan Officer, Jim Markham, who can provide a Prequalification and Full Approval for buyers with or without a Property. Chase has several loan program Exclusives like 1% Cash Back.
It is a great privilege to be part of the Chase Bank Short Sale Priority Partner Program.
California was awarded $18 billion as part of that agreement.
Take your time and read this if you have any questions or concerns email me and I will respond to you.
click here to read the full report.