There are many programs available to home owners right now.
HARP, HAMP, HAFA and regular short sales, as well as Deed in Lieu of foreclosure, with foreclosure being the worst.
You can start by finding out all of the options available to you.
Many attorneys do free consults.
There are realtors who have been trained to work with homeowners like yourself, who find themselves in in pre-foreclosure situation. You can refinance, do loan modification, do a HAFA short sale, regular short sale of Deed in Lieu (if worst comes to worst)...You can call your lender, explain that you are in financial hardship situation, and find out about some of the options available to you. In some short sales, lenders pay your taxes. In other cases, lenders will pay the seller to do the short sale (if qualified).
Whatever you decide to do, you'll probably be better if you do your short sale it right away - starting from contacting an experienced CDPE agent (Certified Distressed Property Expert) in your area (you can find one on CDPE website).
For tax questions, it is best to consult a tax professional. I also highly recommend a Stop Foreclosure Now book. If a person is broke, for example, an insolvency exemption could apply (which means that you won't pay any deficiency). It is also important to make sure that the bank waives the deficiency in their approval letter (some do and some don't). It sounds that you do have 2 requirements of the short sale though: the property is upside down financially, and you do have a hardship...
Please feel free to call me if any questions.
Hope this helps,
Irina Karan, CDPE
Beachfront Realty, Inc.
It sounds like you may have a good basis for a short sale. I'd recommend you not wait - right now it typically takes 6 months to get a short sale done, and the current tax relief ends in 2012. (See the IRS link below).
The short sale negotiator (I would recommend a lawyer who has done 1000s of such transactions) will negotiate between your banks, the condo association, the tax collector, and any other liens to ensure that the short sale can occur.
Because people are seeking bargains, you want to price correctly so that you can get multiple offers quickly, stop showing, and then simply wait for the bank to make their decision.
Call me if you'd like to discuss this further.
As part of the Mortgage Forgiveness Debt Relief Act of 2007, bill; H.R. 3648, was passed by Congress and was signed by President George W. Bush in December of 2007. The bill, grants relief to homeowners that have been given relief from mortgage debt through a foreclosure, short sale or other similar agreement with the lender. Generally, eligible debt is what is referred to as acquisition indebtedness. Acquisition indebtedness is defined as debt incurred to acquire, construct or rehabilitate a residence. However, refinanced debt will qualify, so long as the debt does not exceed the original amount and home equity debt will qualify so long as the funds were used to improve the taxpayer's home. No relief is available for cash-outs. The forgiven mortgage debt must have been secured by the residence and no more than $2 million of mortgage debt is eligible for the exclusion ($1 million of mortgage debt for a married person filing separately). The relief applies to qualified debt forgiven between January 1st 2007 and December 31st 2012.
The answer as to wether you will owe or not you the bank will require a contribution from you at closing rr not is usually no so dependent on the amount of the deficiency but instead on other factors which often tend to be very specific to each situation. I can tell you that we recently obtained a release for a seller who owed ober $700,000 and the property sold for about $300,000.
Past due property taxes can be resolved as part of the negotiations.
Please feel free to google my name (Joe Robaina with Realty World) to find out more about me and my qualifications. I am part of the short sale specialist network and would be glad to meet with you at your home or my office (16300 NE 19th Ave, Suite B, North Miami Beach, FL) without any obligation if you would like to find out more about my qualifications.
I am currently helping dozens of other embattled homeowners in similar situations throughout this area.
At your service,
If you rent it out will you break even or lose money? Have you talked to your bank to see if they have any loan modification programs?
I believe as your primary residence you most likely will not receive a 1099. It is part of Obama's plan if your bank participates. They also agree not to pursue you for any deficiency.
Make sure you use a Realtor that has experience with short sales as in closing them, not just beig aware of them.
I cant jhelp you as I am too far away.
Southern Premier Realty
Cape Coral, FL