Frank- Good afternoon. My name is Eric. I just came across your blog on the web and wanted to see if there's anyway possible you can help me.
In September of 2006, a friend of mine and myself signed a contract on an NV home to be built in Leesburg, yes...I'm here in Northern Virginia! We closed on the house 6 months later and have been in possession of it ever since. We bought it for $750,000 and as of a couple week ago there was a short sale right next us on the market for $510,000- almost identical house.
We put 10% down and currently have 2 loans on the property- both through Wells Fargo
The property is rented, but between my partner and I, we still have a shortage of around $700 that we have to pay out each month.
One of our biggest concerns at this point even if a short sale was an option, is the implications after we close on the forgiven debt. Since it's an investment, there is no forgiveness on paying taxes on forgiven debt. Since there are 2 mortgages, I don't think deed in lieu is an option. And since both my partner and I have our own houses, we're afraid that the bank will come after us for the difference if we let it foreclose.
I've been in touch with a company called HomeAssure, that for $2500 claims that can get a short sales approved, but I'm just too skeptical of them at this point.
Bottom line is I have no where to turn and no idea what to do....it seems there's no way out and the walls are closing in quickly.
Any insight or help would be appreciated.....or, if you think there's something you could do to help I'd be more than happy to discuss options with you.
Thank you SirEric
Sorry Eric. I don't see it happening.
First of all, a Short Sale is irrelevant if it never sells, so don't compare your value to a possible Fake Listing.
Secondly, you kinda skipped something in your email. You are asking about the 1099 Phantom tax, which you will have to ask a tax advisor about, but I don't see why you would be exempt, but your bigger problem is you left off the huge requirement for short sales: You have to be near bankrupt and prove your financial ruins.
And lenders are FAR less likely to give leniency to investors, in part since they are more likely to hide funds. And if you have another house, they will expect you to refinance your current house to pay your debt obligations. They will suck you dry before giving you any write off.
Too many people think that Short Sales are an easy way to have the bank eat their losses.
And others think that just letting it go into foreclosure is a better option (I got an email regarding that last week from somebody that might be broke in 10 months, he just let them foreclose and is now crossing his fingers that they don't come after him for a deficiency judgment)
As for HomeAssure, I don't know them, but I doubt it. I have called these types of places before and many were scams. Maybe if you got some immediate local references. And if they accept the $2,500 to be placed in escrow and payable upon getting Short Sale approval, MAYBE, but be careful. But my guess is they only take money up front without a guarantee.
You should talk to a lawyer that specializes in this stuff. I am NOT a lawyer.
Hope I was able to shed some light and maybe give you some questions to ask if nothing else.
- Written by Frank Borges LL0SA- Broker FranklyRealty.com