Home Selling in Los Angeles>Question Details

Satish, Home Seller in Los Angeles, CA

Can I do short sales?

Asked by Satish, Los Angeles, CA Thu May 17, 2012

I have a house with Digital Federal Credit Union, MA. My house is upside down and its a 5/1 ARM. I am thinking of doing a short sales. Will I be liable for the difference?

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Answers

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In a successful Short Sale, you will be given a 1099C. This means the bank has considered the loan Paid and done. You will then take this to a CPA or a tax professional to reduce or get rid of the tax burden. If you qualify for the " Mortgage Debt Forgiveness Act" it will be eliminated that way. Short answer. Do it - see a tax guy - be happy.
0 votes Thank Flag Link Sat Feb 9, 2013
You will be liable, but it's really easy to get out of this debt. Millions are doing the same.
If you want to stay at your home, you should look at short sale the house and rent it back from the investor until you fix your credit and can qualify for a loan to purchase another property for your self.
There are many investors that will help you this way. You don't have to pay any money from your pocket.

I attached a link below so you can read more about it. I hope this will help.
Good luck.
0 votes Thank Flag Link Sat Sep 29, 2012
Hello Satish,

You will need to speak with a Realtor in a much more formal capacity, other then asking this question over the internet. I'm a short sale specialist here in Los Angeles (certified SFR by the National Association of REALTORS). I would not feel comfortable qualifying you for a short sale over a public forum.

If you would like to discuss this further, feel free to contact myself, or any other qualified real estate agent, with short sale experience.

I hope this helps!

All the best,
Kieran Jackson
Keller Williams Hollywood Hills

Short Sale Specialist (SFR)
Web Reference: http://KieranTheRealtor.com
0 votes Thank Flag Link Tue Jun 5, 2012
Satish,

In order to to get a short sale approval from your lender, you will need to demonstarte a financial hardship.

Simply being upside down on your home is not, in most cases a good rational for short sale approval.

You will need to submitt a financial hardship letter to your lender in which you outline what has changed in your financial status since you first secured your mortgage. You must be prepared to provide the bank with your financial info such as: Bank statements, tax returns, pay stubs, and monthly expenses. Your lender may even run your credit

You will also want to make sure your bank is not DOUBLE TRACKING you, meaning the foreclosure department is moving ahead with the foreclosure process at the same time the loss mitigation department is working with you on a short sale approval.

Best Of Luck to You!

Kawain Payne, Realtor
0 votes Thank Flag Link Sun Jun 3, 2012
Thank You!
Flag Mon Jun 4, 2012
Thank You!
Flag Mon Jun 4, 2012
Satish please feel free to give me a call. I would love to help you. My number is 205-514-5177.
0 votes Thank Flag Link Fri Jun 1, 2012
Hi Satish:

If you complete the short sale before the end of the year, most likely, you will not be on the hook for the difference. Most banks/lenders/investors will write off the balance and do a debt forgiveness to the seller.

However, as is stands right now, there are not tax consequences for doing a short sale and the IRS has debt forgiveness as well, where there is no tax on the deficit. As of January 1, 2013, this may not be the case...Congress is still evaluating weather or not they will extend this.

So...if you are going to do a short sale, it may be in your best interest to complete the sale before the end of this year.

You may want to speak to your accountant to discuss your tax and other financial consequences related to a short sale.

Feel free to contact me directly if I may be of assistance to you, or if you would like to discuss your options.

All the best and Good Luck!

Kat Becker, Realtor
Prudential California Realty
katbecker@prula.com
0 votes Thank Flag Link Tue May 29, 2012
Thanks to everyone for your valuable feedback
0 votes Thank Flag Link Fri May 18, 2012
Thanks to everyone for your valuable feedback.
0 votes Thank Flag Link Fri May 18, 2012
Dear Satish,

When we do short sale in Ca, all liens must be satisfied, seller is not liable as for the difference; seller can't come out with any profit; however, most of the lenders will approve a concession to the seller from $3,000-$30,000. There is more to short sale.
You should look for a Realtor with a few short sale certificates and verify that they know and has experience in negotiating it.

I have done many, including 4 liens, with Franchise Tax Board/ IRS and other liens while the seller was leaving in the home until I got all agree and approved.
Please contact me for any question or to give you more details how to do it successfully,

Have a great weekend and good luck!

Ronit Bendavid,
Specialized in Short Sale & the approved expert by HUD (Housing dept.HAFA national and Redfin.com in SFV & Ventura Cty)
Realtor, Certified SFR (Short sale), E-Pro, GRI (Graduated Realtor Institute, national), ABR (accredited buyer Rep)

Voted Favorite Realtor by Daily News Readers every year since 2005 and now 2011 too!!!
Pinnacle Estate Properties
18653 Ventura Blvd Suite 704
Tarzana, CA 91356
Office: 818-330-3333
Fax: 818-274-5910 / 888-220-3434
DRE # 01311212
0 votes Thank Flag Link Fri May 18, 2012
Satish,

The Federal Debt Forgiveness Act does apply and you do still have time to complete your short sale. You did not mention if you had a financial hardship making the monthly payments. In the past, a hardship was required. But now, many banks are agreeing to "strategic" short sales where the owner still has income, but prefers to walk away from an upside-down property.

I've been doing short sales since 1996 so I know what I am talking about - call me - I can help.

Bill Mota
626) 233-0190
Broker Associate
FirstTeam SnS
0 votes Thank Flag Link Fri May 18, 2012
Dear Satish:
This is what I can do for you:
Determine the requirements of your lender to approve your short sale. (This may vary due everyday updates)
â– Facilitate the submission of required documents from you to the lender including a "hardship letter" which speaks to changes in income and/or expenses.
â– Determine a listing price for your home, and diligently market it for sale.
■Communicate regularly with your mortgage lender’s short sale negotiator to work towards a selling price that they will agree to.
â–  When you list with me, you will also be represented by a team of real estate attorneys. They will negotiate your short sale and get the best possible settlement terms. This extra legal protection is included as part of my service and there is absolutely no cost to you. Short sales are complex transactions, and you need someone who can protect your interests and work at your side.
0 votes Thank Flag Link Thu May 17, 2012
Madelaine Kolisnyk answered:
Home Seller???
Only with one loan?
A short sale will affect your credit. However the short sale itself is not what causes the big credit point hits. It’s that coupled with missing payments. Missing payments is what does more damage. However in under 2yrs, you can really boost your credit score back up by remaining current on all other debt obligations.

It is possible to complete a short sale without ever missing a payment. It is possible to do a short sale without having a severe hardship.

If this is your primary residence or you lived in the property 2 out of the last 5yrs, you can qualify under the Mortgage Debt Forgiveness Act of 2007, so the IRS or the State can’t tax you on the negative amount.

It’s not automatic that the bank won’t go after you for a deficiency judgment on the negative balance, however it’s something that I’m able to negotiate OUT. If your 2nd lien was a PURCHASE MONEY loan than the 1st will need to offer them 10% of that $75k balance in order to get the 2nd lien to Release you as paid in Full. Again this is something that we negotiate for the 2nd lien holder to do.

It may be possible to get the $3k for relocation expenses, this is under the HAFA program. This Government program, much like the HAMP program for loan modifications has been more or less a complete failure.

I negotiate short sales for clients successfully within a 100 mi. radius of where I live. I don’t need to be your next door neighbor to assist you with selling your home as a short sale. Please email me directly so we can talk about this further.

Madelaine Kolisnyk Realtor Los Angeles ca 310.869.1712 - Mon Jul 11, 2011
Hi , My Name is Madelaine and my team and i specialize in Short Selling property all over Los Angeles. We are in escrow with about 7 now. All going through. Need to make an appointment with us to see your home and discuss your situation.. Your circumstances have a lot to do with you getting relo fee and the bank accepting your property as a short pay.

Short Sale Expert / madelainekproperties@gmail.com
Madelaine Kolisnyk
310.869.1712 http://www.MadelaineK.com - Tue May 17, 2011
0 votes Thank Flag Link Thu May 17, 2012
I can answer each and every detail for you. I head up our office short sale department for Coldwell Banker Beverly Hills. I can make this painless and easy for you and you will not have to pay anything and can possibly even earn some money. Please contact me directly and I would be more than happy to assist you.
Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills South
166 N. Canon Dr, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0690 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Thu May 17, 2012
Hi Satish, if you are in California, then you should not be held liable for the difference. We have the SB 458 Law. Please read: http://short-sale-vs-foreclosure-help.com/what_is_sb458_sb_4…
The law states that if the lender accepts a short sale, then they may not pursue the borrower for the difference or any difficiency judgement.

Please contact me for short sale of your property. My services are FREE to my short sellers.

Thank you,
Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Direct Phone 818-903-2040
Rodeo Realty
Dre license #01712757
0 votes Thank Flag Link Thu May 17, 2012
Thanks.

Even If I get permission from my lender, will I be liable for the difference?

I heard about "California - Debt Forgiveness Act" which expires on 01/01/2013, where the difference are forgiven?

Is that true?
0 votes Thank Flag Link Thu May 17, 2012
Contact your Lender is the best way to find out.

you must have permission from your lender to do a short sale too.

Good Luck
0 votes Thank Flag Link Thu May 17, 2012
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