Rg,

I wish there was a straight answer for this question because it would make my job much easier. Some backs are forgiving the difference, yet providing the sellers with a 1099 for the difference in selling price . . . therefore, the deficit in selling price is considered income for the year and you will need to claim it on your income taxes, while others are requiring sellers to pay back the difference. From what I understand, the bank's decision on how to handle any individual's situation is conditional upon the circumstances . . . which makes this even more confusing to us all!

What you reallty need to do is consult with your Bank. At a minimum, I would give an anonymous call a try . . . . . don;t tell them who you are but expalin your circustances and see if they will provicde you with even an inkling of sound advise (which I doubt), but at least you may get a perspective on how how flexible they may be. I most recently dealt with a bank that floored me in their cooperation/understanding of my client's situation.

Love and Peace,
Francesca, ePro, SRES
Francesca@PatrizioRE.com

Ragu

Yes, You can talk to your bank and see whether they can agree for short sale.

Regards
Devkumar
Keller Williams Realty
732-322-7255.
dev@devrealtor.com

Hello Rguevara.............

To keep this simple, so that you're not overwhelmed by all this information............yes.............you will still owe the bank the balance of the amount you originally borrowed. It doesn't matter how much you sell the house for - the bank wants to be repaid.

If you sell for less than you owe, you will be expected to come up with the difference.

If you can't do that.....If you have a hardship......you may qualify for what is referred to as a "short sale".
I suggest you call and speak with someone from the bank or mortgage company to see where you stand......they will sit down with you, and explain your options.

Best wishes...........
Debbie Rose
Prudential NJ Properties

It sounds as if you may have a mortgage high enough that if you don't get your price, you will have to bring money to the closing, making it a short sale? If so, yes -- you do have to pay off your mortgage. What is the basis that you used to determine the value? Generally, you should look at sales and under contract in the last three months, and how long those homes stayed on the market to get what they got, and how yours compares to theirs, in terms of upgrades, location, and style. I strongly suggst that you meet with a realtor to get a market valuation for your home, and add some cushioning in case you don't get your price. Don't forget realtor commission, any liens or second mortgages, taxes due, etc. If it's really close, speak with your attorney to determine next steps on what your options are with the bank. If, after your review you decide you will be in a position where you owe money or cannot close, and you can afford to stay where you are, that may be an option. Since I don't know your situation, it's hard for me to judge the best route to take. Best of luck.

Found this information by googling short sale to get you a summary. Found this on shortsalehelp.com. I am not affiliated with them, but they seemed to summarize my take on the situation:

•Figure out the true value of your property. Many times a real estate agent can provide a 'market analysis' and give you a good idea of what your home might sell for. You can also use Zillow or other real estate related sites to determine the rough value of your home. If the market is moving down keep in mind that your homes value may be moving down as well and estimated valuations may be valid for only a short time.

•You also need to calculate your estimated closing costs. Items such as a title report, escrow, appraisal, attorney fees, agent commissions, unpaid property taxes etc. may add up to a substantial amount of money.

•You'll need to know how much you owe on your property. Include all loans on the property in your calculation.

•Calculate your equity. Normally the value of your home is more than the total of the loans and closing costs. If your closing cost estimate plus your loan amounts are higher than the value of your property then a short sale is a possibility.

Home sellers should consider a Short Sale when the value of their home is LESS than the amount of their outstanding loans. For example, if your home is worth $250,000 but you have a loan of $260,000 then a short sale is a consideration. Obviously, if you do not have to sell your home, you could wait out the market and hope for a turnaround in real estate values.

However, if you do have to sell your home you basically have three options. First, you can bring cash to the table. In the example above you would sell your home for $250,000 and pay another $10,000 to the lender out of your pocket to pay off the loan on your property. Second, you could let the home go into foreclosure. The lender will go through the foreclosure process, force you out of your home and then auction it off to the highest bidder at a foreclosure or Trustee's auction. The third option is to pursue a short sale. You contact the lender, explain the circumstances and convince them to take less than full value of their loan.

In the case above you may tell them you have a buyer for $250,000 and it's very unlikely there will be a buyer at a higher price. If they will accept $250,000 for their $260,000 loan then you can proceed with a short sale. Sometimes the lender will consider a short sale before you have a buyer and you can market your property and, if you find a buyer, take their offer to the lender for consideration. The lender may or may not accept the offer

Hello:

Yes you would still owe your mortgage company for the remaining amount unless you have some type of hardship. You can then speak with your mortgage company and proceed with a short sale. You would first need to speak with your mortgage company and they will let you know the paperwork they require to see if they will approve a short sale on your property. I hope that helps.

Thank you,
Gina Fagnani
Realtor Associate
Century 21 Hearst Realty
GinaFagnani@aol.com