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Home : Blogs : Margaret Woda, Maryland Real Estate & Military Relocation Services : Maryland Real Estate

Maryland Home Sellers, New Relief for Short Sales

Most Maryland home owners won't be affected by the new tax bill signed by President Bush yesterday, but anyone who purchased or refinanced their home in the past 2-3 years could be, if the loan balance is higher than today's selling price. That situation is known as a "short sale".

Homeowners were taxed on any amount forgiven by a lender in a short sale negotiation or foreclosure, in the past, creating a tremendous financial burden. Now, under The Mortgage Relief Act (click here), the loan amount written off by your lender will no longer be considered taxable for debts forgiven between Jan. 1, 2007, and Dec. 31, 2009.

To find out how this legislation could affect you, please follow this link:

Crofton Home Sellers - Relief for Short Sales

________________________________________

Find a Home and learn about Real Estate Market Conditions in Crofton and Anne Arundel County, Maryland. Check out Today's Rates, use the free Mortgage Calculator, and watch a brief video about the Power of RE/MAX. These consumer-friendly real estate tools are provided by Margaret Woda for you to use at your own pace.

When you're ready to go from "just browsing" to "let's get serious", contact Margaret online or call her at RE/MAX Vision in Crofton Maryland. 410-451-1900

DISCLAIMER: Information contained in this post is deemed reliable on the date of publication, but it is not guaranteed and it is subject to change without notice.

________________________________________

Margaret Woda, Crofton Realtor

Margaret Woda, REALTOR & Associate Broker
Long & Foster Real Estate, Inc., 2191 Defense Hwy., Crofton, MD 21114
Direct: (410) 451-6245 or click on EMAIL

FREE Maryland home search online
FREE online relocation information
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Posted by Margaret Woda, Maryland Real Estate & Military Relocation Services on 12/21/2007 11:23 AM

Comments (19)

mortgage relief act, short sale, crofton maryland real estate, avoid foreclosure

Originally posted at: Fort Meade - USNA - Andrews AFB: Maryland Home Sellers, New Relief for Short Sales

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This post has been included in Maryland Real Estate News Anne Arundel County, MD Real Estate News Crofton, MD Real Estate News

19 Comments on Maryland Home Sellers, New Relief for Short Sales

DEC

2007

Margaret,

Like your post, we need to be direct with consumers and reach out to them and their needs!!! I love this last paragraph, it is so transparent...

"Selling your home in this market requires more than luck... There is no substitute for experience! In the past I have actually helped clients negotiate VA compromises, MIP bail-outs, and short sales - not just read about them or attended a "how to" class. If you are "upside-down" with your mortgage loan and want to sell your home now, contact me to find out how I can help you."

Thanks, Fran

Thanks, Fran. I do get tired of people claiming to be qualified to help clients with short sales, based on reading a blog or two... maybe attending a class. It's NOT easy! Goodness, I'm surprised you found this post at all - I didn't post it anywhere except Localism and Posts to Localism.

hi Margaret,

I just informed my client who we closed on her short about 3 weeks ago that at that time she might receive the 1099 from the bank on her short overage. She wasn't that badly over due to my excellent estimate:) and the most would be $1000 but told her to consult an attorney or accountant. Also not every bank will send you one but she should have been prepared anyway. I'm glad they did this ...why would a person who already needs relief have to pay taxes on a the amount of relief? didn't make sense in the first place.

Margaret, short sales are a whole other ballgame and there are too many agents who say they specialize in "short sales" who don't have a clue! Great post.

Neal - I can't imagine the fear of taxation on top of the stress from dealing with a short sale. 'Glad for your client that she'll have some relief from this new bill.

Linda - You're right. A short sale is more than another form of financing - it's a really tricky negotiation that involves the homeowner, the lender, and often the title company and an attorney. A real estate rookie would be wise to involve a manager, broker, or "old pro" in the office as a resource in this situation.

I love this line "There is no substitute for experience" ...I just wish we could get that message across!!!

Monika - I have nothing against new agents, and we all were new at some point. I envy their enthusiasm and the youth they often enjoy. However, it is true that there is no substitute for experience - and short sales is one area where experience can make a big difference!

DEC

2007

Hi Margaret: Good Ol' George Voinovich. He was mayor of Cleveland at one time... and he did a great job. Funny, but both Voinovich and Dennis Kucinich were mayors of Cleveland. Who would have thought that being Mayor of Cleveland would be a jumping-off point for Congress ? Thanks for sharing.

Margaret you are absolutely correct Short Sales are not easy. Although I have not been on the listing side I have had buyers who were buying a home that went into foreclosure 2 x's over the course of the contract and it was a mess. Anyhow experience is the key.

Karen Anne - I guess everyone has to get their start somewhere!

Katie - Thank you. I hesitate to hammer home "experience" on AR since there are so many newbies, and I don't want to offend them. But this is one area of real estate that it IS important, like it or not! Fortunately, when I encountered these situations in the past, I had real pros to guide me through - my first VA compromise was for the sister of an attorney who actually lectured agents all over the country in short sales, and my first MIP bailout was for a former mortgage company President who was dying of cancer, and knew just what had to be done. These two cases gave me the confidence and background to take on short sales after that.

I am now considering short sale for a house in Maryland, but have received much conflicting advice and info. I took over a property to assist a friend, but now he is now about to declare bankruptcy and leave me holding the bag for the entire debt of the property. The market bares about $100K less than what I owe. I need to know how bad this will effect my credit rating, if i need to use the same RE agent who i am currently with (has not been able to sell the house for many months), etc.

Seeking any advice, i am desperate, i do not want this house, but dont know how to get rid of it.

Neil.cohen2@verizon.net

Neil: What exactly did you do when you say you "took over" the property ? Were you on the original note as a co-borrower ? If not, were you added to the note somehow with your friend still being on the note ? My guess is that if you are "officialy" on the note along with your friend... then yes, I believe losing the house will hit you pretty hard. First try and explain to me what officially happened. Second, call the lender and see if you have legal liability on his mortgage.

Finally, if you are going to try and sell the house, get yourself a Realtor who specializes in short sales. I think Margaret Woda would be great ! Call her. Her cell number is (443) 292-2029.

Neil, I'll contact you directly via email.

DEC

2007

Margaret- I wrote a post about this for Florida. I found out upon further investigation that the short sale forgiveness is for principle residences. Investors do not get the break. Also, you must have lived in the home 2 out of 5 years. Katerina

Katerina - Good points, and I appreciate your mentioning them. We don't have many absentee owners here, unless they are people who are away on a 2-year transfer to another military bases or something like that, and expect to come back. But that 2 out of 5 years factor could be important to me. Thanks for the head's up.

JAN

2008

Margaret--Great post!!! Just completed a short sale for a client. I kept stressing the importance to the seller during the process about completing the short sale and not having the home go into foreclosure. If that happened his credit would be severely damaged for 7-10 years. Even if he was 30 days late on 1 mortgage payment, his credit score could drop by over 100 points and take years to recover.

Thanks for your compliment, Rick, I had a phone call just this week from someone who read this post on my other blog (www.FocusonCrofton.com) and she was so stressed - I think people are really freaked by the news reports. She is not as bad off as she thinks, and I bet there are a lot of people in that position.

FEB

2008

Hello Margaret,

I have been reading this string and do have one question with regards to a short sale. Is it true that the lender can still file a judgment against the seller for the amount of the shortage?

Thanks

Kevin, Much as I would like to answer that, real estate agents are not allowed by law to answer legal questions. If your property is in Maryland, use the contact link on my profile page and send the question to me - I'll reply with the name and number of an attorney who will answer that question for you.