4 Reasons Why 2011 May Be the Year for A Short Sale of Your Orange County,California Home
I feel like I'm stalking Tni, can she block me on AR the way she could on Facebook? Uh, oh. But another great post and something troubled homeowners should read and understand.
I know it's hard....I talk to these sellers all day long...but you need to take the emotion out of the situation and make a rational decision.
I've lived in many homes over my lifetime. As an owner and as a renter....and do you know that none of my fondest memories had anything to do with where I slept that night. We all know the stories about honeymooners with nothing to their names, eating Top Ramin...and being happier than when they "make it."
A structure is not a home....and this is a good time to make decisions that will affect your long term financial health.
4 Reasons Why 2011 May Be the Year for A Short Sale of Your California Home
•1) California Senate Bill 931 (SB 931) - This important new law went into effect on January 1st. It requires that first mortgage lenders forgive the deficiency when they accept a short sale on a dwelling with up to 4 units. (The deficiency is the difference between what was owed on the mortgage, the expenses of sale, and the amount it was sold for during the short sale). Without the protections of SB 931, an individual short sale seller had to make sure that the bank forgave the deficiency in the short sale approval. Often, as a matter of policy, national banks would refuse to remove this possibility - leaving short sale sellers in limbo. That uncertainty has been removed when dealing with a first mortgage lender in California by this new SB 931 legislation.
•2) Tax forgiveness on principal residences. Under the federal Mortgage Forgiveness Debt Relief Act of 2007, sellers have a limited window of opportunity until the end of 2012 for potential tax forgiveness on the short sale of their principal residence. Also, California state tax relief is limited as well until January 1, 2013. It is possible that these favorable tax laws could be extended, but they also could not be extended, making 2011 an opportune time to short sell your home.
•3) Recent HAFA Updates - The government HAFA program has been revised (effective February 1, 2011) to make processing a short sale smoother under the HAFA. Participant servicers are no longer required to verify financial information (although they still may if they wish), caps have been removed from amounts that second mortgage lenders can receive (giving more room to negotiate a deal everyone will agree to), the subject property can be rented for up to 12 months prior to the Short Sale Agreement if it was previously the seller's principal residence, and the time period for lender response to executed offers has been tightened.
•4) You've had enough. - This may be the most important reason of all. Often, I meet with clients who are considering a short sale and when we begin to discuss things, I discover they have been in financial distress for 2 or more years. If your home is massively underwater, the sooner you put it behind you the sooner you can begin your new life. If you short sell your property, you may be able to get a new loan in 2 - 3 years under current FHA and Fannie Mae guidelines. The sooner you complete the short sale the sooner that clock begins.
I am a Certified Distressed Property Expert and a Certified HAFA Specialist, and I can provide an in depth short sale consultation when you are ready; I can be reached at (805) 878-9879.
Tni LeBlanc, Mint Properties
Broker/Attorney, Short Sale Agent
CA DRE License # 01871795
(805) 878-9879Serving Santa Maria, Orcutt, Nipomo, Los Alamos, Santa Ynez, Los Olivos, Solvang, Buellton, Lompoc, Arroyo Grande, Grover Beach, Pismo Beach, and Avila Beach.
*Nothing in this article is intended to solicit listings currently under contract with another broker. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement - this article does not offer legal and tax advice.
Copyright © Tni LeBlanc 2011 *4 Reasons Why 2011 May Be the Year for A Short Sale of Your California Home*
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