Whether or not the bank will pursue a deficiency depends upon the type of loan you have, as well as the terms of the short sale. If you have an FHA loan, and you are accepted into the FHA Pre-foreclosure Program, the lender is required to waive the deficiency in the event an acceptable offer is submitted, accepted, and closed. I have done MANY short sales, and none have my clients have ever been asked to make a contribution where their only assets were 401K or life insurance. I am an attorney as well as a realtor, but that being said, beyond what I have stated above, each case is different, and there are just too many variables to fully and accurately answer your question without more information. I act only as a realtor on my short sale transactions, and do not dispense legal advise. That second lien could be a concern if they are unwilling to accept the settlement offered by the first lien holder. They frequently do, but not always.
Hud looks at all offers, and yes owner occupied and cash is their dream. They look at the overall contract and pick via the best terms in a sellers eyes. The bottom dollars to them, if there is financing- more down is always a positive on loan processing, along with how quick a close. Your best with no buyer concessions to win the offer, just make sure you check out the house. Do your homework.... more
It depends on how long ago they died. If they died within the year then it may be possible to take advantage of the capital gains exclusion here. If it has been over the time limit set by your state then you may have little or no recourse of the deduction. I have the name and number of a great accountant in Overland Park if you need it. Has the house been sold? That is another great question that could determine the tax burden.... more
You will likely find some lenders that will encourage you via this answer board but it is becoming increasingly difficult in this financial climate to find financing with obvious negatives like these. I would consider renting until your credit is in good shape again....try to avoid a high interest or a rent-to-own situation that can threaten to put you back in the same situation. I hope it all works out for you...good luck!... more