Countless closings have been adjourned by clients who were unaware of the compensation due to the real estate agents, simply because the agent didn't take the time to thoroughly explain the many types of agency at work in any real estate transaction. Call or email me and I'd be happy to explore the many ways in which I can assist you in your purchase.
RE/MAX ADVANCE REALTY II
The three stages of Foreclosure are: Pre-Foreclosure, Auction, and REO/Bank Owned.
Pre-Foreclosure is the time period a homeowner has to repay the delinquent amount of the mortgage.
If a homeowner does not pay the mortgage the home is auctioned.
If the bids do not meet the reserve the lien holder (bank) reclaims the property and it becomes a Bank Owned REO.
The home owner move out is usually negotiated with them by the bank or lien holder.
First, the mortgage holder files paperwork with the court in an attempt to recover the value of what they are owed. If that does not happen, it will be called to the bench and the judge will issue a judgement for what is owed plus court cost and the cost of the bank to recover the value. If the homeowner does not come up with that amount of money, the court will order the house to auction to recover the value.
In an auction, anyone can bid on it but typically, the first bid is the amount of money that is owed in the judgement. If no one overbids that amount (and in this economy, no one does) the house reverts to the bank. Once that happens, the owner has a "redemption period," typically 60 days to satisfy the judgement. If that does not happen, the bank can then put the property up for sale. They will either assign it to a broker or list it through their own REO Dept. and it will be offered for sale just like any other property.
When the bank sells it, if the sale price is less than the amount of the original judgement, the bank can then go back to court to try to recover the difference and ask the judge to issue a "difficiency judgement." If that is granted, the owner will carry that liability for 20 years. The bank has the right to place leins on the owner's property and wages to recover the money. The banks, to this point, have not be very aggresive in pursueing defficiency judgements but the mechanism is there.
In a short sale, any difference between what the owner owes and what the house sells for, is considered income by the IRS and will be reflected on a 1099 Misc. Income form and will be taxed as income. There is a mechanism to ask the IRS to forgive the tax, sometimes they do, sometimes they don't.
This is a really difficult situation and one of the reasons our economy is in such a tough position
If you are in this position, it is best to consult a good real estate attorney. He might be able to make a better deal for you.
If I can help you, please let me know.
Before the bank foreclosure on the property, there is a judgment sale date in the process if the property does not sale, the bank acquire the property via Certificate of Sale/Title, the bank may go after the borrower's to collect the unpaid balance plus foreclosure costs by issuing a deficiency judgment with the county court or something they sale the unpaid balance to a collection agency which goes after the borrowers for collection.
SHORT SALE is a good way to avoid all this most of the times the bank satisfy the mortgage and report to the IRS the looses to them (bank) and credit to you, which then you need to see with your accountant to write-off that.
Personally all short sale that I have done for the borrower's the bank always satisfy the mortgage and report to the IRS the looses to them (bank) and credit the borrower's
Seek attorneys advise if you need too.
In Florida we are a "deficiency judgement" state so the lender can come after you for their total loss including court costs, legal fees, late fees, etc. Some lenders will sell it to a collection agency.
If it's not too late, call a Realtor asap to try to get a short sale done.
All the best,