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Mortgage Foreclosure Article
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Learning About Foreclosure & Short Sale
from:Foreclosure on a home is a devastating process for the homeowner. They often feel that all their life-long dreams of home ownership are going down the drain. For whatever reason, they are no longer able to make the payments on their home so the home is in foreclosure. When a home is in foreclosure, the lender is selling the home at public auction where the highest bidder gets the home. Sometimes as an alternative to the actual foreclosure, short sale may take place.
A foreclosure short sale may take place if the lender agrees to sell the home for less than what is owed to the bank. The bank accepts a discounted payoff and releases the mortgage. However, many times the bank will list the home as a foreclosure short sale, but they may not accept the offer given by the new buyer. A home may not actually be in foreclosure for a lender to offer a short sale. If the value of the home has fallen way below what is owed on the mortgage, the lender may consider a short sale as an attempt to bring the price of the home in line with market value.
Although to avoid a foreclosure, short sales are often accepted, there are circumstances where the lender may not want to accept a short sale. In some circumstances, the lender will come out ahead if they go through with the foreclosure. This may be the case when the value of the home is much higher than what is owed on the mortgage. In a situation such as this, the lender may be able to sell the home for less than it's worth but still be over what is owed on the mortgage.
If you are a buyer looking for a cheap home to buy, be aware of the negatives involved in a pre-foreclosure short sale. You may see a home on the market that seems to be too good to be true. Check with a real estate agency to see if the home is a short sale. The lender may not accept your offer and short sales are seldom simple to complete, often taking months to complete.
A foreclosure short sale may seem like the answer to the homeowner facing the loss of their home. They will have the opportunity to be out of debt, but there are also consequences to a short sale. The largest consequence is the tax liability that may fall on the seller (homeowner). The lender has to notify the IRS of any taxable sales and they may give you a 1099 for the amount they were shorted. Although the Mortgage Forgiveness Debt Relief Act of 2007 forgives many debts in foreclosures, some of the dollar amounts are exempt from this act.
Before you get too excited about a short sale, contact a lawyer to find out your possible tax liability. Another negative about a pre-foreclosure short sale is what it does to your credit rating. It will show up even more negatively on your credit report than a foreclosure. So consider all options when your home is facing foreclosure.
Mortgage Foreclosure Specific links
Mortgage Foreclosure News
JP Morgan Chase Home Loan Modification Program–Homeowners Seek Alternative ... - Red, White, and Blue Press (blog)
 News Quench | JP Morgan Chase Home Loan Modification Program–Homeowners Seek Alternative ... Red, White, and Blue Press (blog) There are accusations that these alternative modification plans, which are set in place to help prevent foreclosure, may not always be in a homeowner's best ... Senator Boxer on California's Mortgage Assistance Programs Cali Mortgage Modifications Face Another Hurdle California forgoes new foreclosure law |
California's foreclosure crisis & racism - Workers World
 Workers World | California's foreclosure crisis & racism Workers World ... paints a stark picture of the devastation wreaked in the state by the banks' racist subprime mortgage schemes and resultant mass foreclosures. ... Foreclosures' heavy toll on health Foreclosures can make you sick Benefits of Foreclosure Modifications |
Fannie cracks the foreclosure whip - Inman.com
 Reuters India | Fannie cracks the foreclosure whip Inman.com According to mortgage data aggregator Lender Processing Services, an estimated 2.02 million homeowners were in foreclosure in July nationwide. ... Mortgage Bankers group spent $745K lobbying in 2Q Fannie program offers excellent loan terms Excessively delaying Fannie Mae foreclosures will now cost servicers |
Stuytown stall - New York Post
 New York Post | Stuytown stall New York Post ... blocking both Ackman and a competing creditor group -- holders of the $3 billion first mortgage -- from any foreclosure actions related to the property. ... Decision Delayed on Stuy-Town Foreclosure Stuyvesant Town Judge Puts Off Ruling on Ackman Group's Foreclosure Plans Stuy Town foreclosure auctions blocked for now |
LPS' July Mortgage Monitor Report: Foreclosure Starts Increase; Late-Stage ... - PR Newswire (press release)
LPS' July Mortgage Monitor Report: Foreclosure Starts Increase; Late-Stage ... PR Newswire (press release) 2 /PRNewswire/ -- The July Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS) shows that foreclosure starts are on the rise, ... |