P.S. The CA Assoc. of Realtors supported legislation (SB 1178) that was eventually passed in the CA Senate on 6/3/10 to maintain anti-deficiency protection if one simply refinanced (no cash-out). This was later vetoed by the Governor ;-(
Secondly if again if this is your primary residence CA is a non-recourse state meaning they can not go after their losses.
If this were not your primary residence you would need to show the bank you have nothing for them to come after through a accountant certified personal financial statement showing that, from this they can see it is a waste of their time and money to try and collect.
Buy a home after foreclosure expert
Helping families/people that have lost their homes get back into a new one in as little as 6 months
Your question is not clear. Has the lender foreclosed as of 01/14/11 or just filed the Notice of Default? You state there is no auction yet. Do you know the auction date? If the lender just started the foreclosure process on 01/14, then you have at least 111 days from that date to the auction date.
Now to the statement that 3 short sale offers failed. Again, this raises more questions than it answers. Were the offers at or near fair market value? Did the listing agent have short sale experience and success? How well was your package put together? Often a poor short sale package, accompanies by a 'low ball' offer not only causes the short sale to fail, but also flags your file and may make it harder to get a subsequent offer accepted. Some negotiators just take this stuff too personally.
Lastly, in response to how you avoid tax or mortgage liability. An effectively negotiated short sale should include language that relieves you of any future liability for the shortfall on the mortgage. Additionally, there are laws in California that address both the tax liability and the mortgage deficiency liability. The federal govt has also passed laws to help home owners, who lose their homes to foreclosure or short sale, not get hit with huge tax liabilities due to this process. Unfortunately, every case is different and some people may NOT qualify for these protections. Best to speak with a tax advisor and/or seek legal advice on these issues. I would be happy to provide you with referrals.
If you want to discuss your particular situation, please feel free to contact me. There is no cost or obligation and I may be able to point you in the right direction. Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
If you are truly considering a â€œdistressed exitâ€ from your home forget about contacting a Real Estate Agent at this time â€“ speak directly with a CPA and Tax Lawyer, they are the experts regarding these matters and the only place you should be getting your â€œexit strategyâ€. I'm not saying that an Agent will not be helpful, but the bottom line is that you are in a legal/tax situation that requires a review of your exact situation as every situation is unique and it appears as though time is quite short to act.
There are several different outcomes that we can expect regarding liability with a short sale. Sometimes the lender will write off the debt completely, then they may 1099 you. Sometimes they won't write it off, but they may or may not ever come after you for the deficiency, sometimes they'll want a promissory note, etc. Sometimes we will get a combination of the above. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.
Eli Givoni, Director
Short Sale Department, LLC
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