Is it time to panic if I want to short sell my home???

short sell my home, Bob Armstrong, B Armstrong, CA2NV

Is a short sale still right for me?

I am asked this question several times a day. I tell my clients that there is no need to panic.

short sell your home, CA2NV, Bob Armstrong

No need to panic!

It would be nice if Congress extended the Debt Relief Act but you still have options. I know this is a bit long but it will be worth your time. First let me give you some background. Finish the article if you would like to learn the most successful way to short sell your home!

The Mortgage Forgiveness Debt Relief Act, which has helped many financially distressed Americans since 2007, is set to end Dec. 31 unless Congress acts. The likely expiration has pushed home sellers scrambling to close on their short sales by year’s end, fearing they’ll have to pay taxes on the debt amounts forgiven by their lenders. The U.S. government enacted the mortgage debt relief law to help folks who’ve had part or all of their loan balances of their primary homes forgiven from 2007 to the end of this year. Forgiven mortgage debt usually is considered taxable income, so the law has been a welcome relief for many borrowers. Consumers could get relief from taxable income on loan balances of up to $2 million, or $1 million for a married tax filer who’s submitting a separate return. California conformed to that rule but with lower maximums.

Mortgage modification and debt relief programs provide real relief to homeowners fighting to keep their homes or trying to get back on their feet. Unless Congress acts, any debt relief to be provided in 2013 under the National Mortgage Settlement, as well as other mortgage debt relief programs, will likely be considered taxable income. On November 20, 2012 The National Association of Attorneys General sent Congress a letter signed by 49 attorney generals written to urge congress to pass legislation to extend tax relief for citizens who have mortgage debt canceled or forgiven because of financial hardships,” An extension is included in the Family and Business Tax Cut Certainty Act of 2012 (S. 3521), which recently passed out of the Senate Finance Committee with bipartisan support.

One thing that’s often missing in this discussion is the fact that there are other situations in which forgiven debt is not taxable. A big one is insolvency, when your debt load exceeds your assets, based on details from the IRS. If you can prove you are insolvent following a short sale, then it’s possible you can get debt relief — without the need of the mortgage debt relief act. Assets include everything from cars to furniture. Click here for more information from the IRS about the insolvency rules.


short sell your home, CA2NV, Bob Armstrong

Help is here!

Realtor’s handle short sales in one of two ways:

Most Realtors go to a class, take a test, and get a designation (SFR-short sale and foreclosure resource) to put under their name. Then they market to consumers that they are experts in short sales. A simple statistic, in CA and NV less than 30% of short sale listing actually close the sale. The problem is that the Agent is handled and recognized by the Lender just like the Homeowner. There is no continuity, there is no clear record of work done, and it just bumbles along until either the Homeowner or the Lender looses patience and allows the foreclosure.

The second method, and the one I use, is to hire a professional negotiator to deal with the Lender. This allows me to do what I do best, sell the home. It takes the pressure off of the Homeowner because only the Negotiator deals with the Lender. This is all the Negotiator does for a living. I use two companies to negotiate my short sales. One charges a fee to the Sellers and Buyers. The other takes a piece of the Realtors commission on both sides. I have been moving more and more of my clients to the second option to save the Buyer and Seller money. HERE IS A FACT…IN BOTH CASES THE NEGOTIATOR COMPLETES ALMOST 90% OF SHORT SALES!

Share this post with family and friends. Hopefully you will provide them with some mental relief. Then call or email me and let me answer your additional questions.

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