There are ALTERNATIVES that allow you to keep the house such as: part 10

Services for Real Estate Pros with Laura Moore Godek, PC



Also known as "pre-foreclosure sale." This option gives the homeowner some time to be able to sell the property to try to avoid foreclosure. If a buyer is found, but the sale price agreed to will not pay the mortgage balance in full, some mortgage companies agree to accept less than the mortgage amount. Mortgage companies will agree to a short sale if they think they will receive more money for the property than they will after foreclosure, while avoiding the costs associated with foreclosure. Some lenders require the owners to sign a new note agreeing to pay part or all of the discrepancy between the amount they received at the time of the closing and the amount needed to pay off the mortgage. In the past, the homeowner had to pay income tax on the amount the mortgage was reduced. However, in December of 2007, Congress enacted the Mortgage Forgiveness Relief Act, which, in most cases, excludes "qualified principal-residence indebtedness" from taxation. The exclusion is retroactive to January 1, 2007.

Comments (2)

Sean Carroll
The Get Off Your A$$ Academy - Manhattan, NY
Real Estate Speaker and "Expert" Coach

good post. Short sales are a much better option than foreclosure for the owner, and you did a nice job of laying out what it is. We are specializing in these now, as its a good feeling to help someone out of foreclosure, while at the same time finding a great buyer who is excited to take ownership

Aug 29, 2008 09:36 AM
Griselda Tealdo-Perez, REALTOR®, e-Pro, GRI, TRC
Coldwell Banker Real Estate - Miami Lakes, FL

Laura, good information. There is so much being written about short sales, but sometimes I believe people end up more confused than before they read the article. Your post is concise and to the point.

Sep 02, 2008 05:27 PM