Foreclosure in 94568>Question Details

Kiwisan, Both Buyer and Seller in Bay Street Viaduct A...

Hi, can anyone recommend a real estate attorney in the bay area?

Asked by Kiwisan, Bay Street Viaduct Area, Savannah, GA Thu Sep 25, 2008

I'm looking for an attorney in the tri-valley / east bay area ( north ca) who has experience with short sales, foreclosures and tax issues that can advise me on my properties. Reasonable rates are always good, thank you.

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Hi Kiwisan:

I read the answers from Steven below and while it's very detailed, I still strongly advise you or anybody else to consult a tax accountant and/or attorney who handles these kind of situation. The properties being investment properties make it even more difficult to determine.

I and other Realtors in our office handle short sales and such. One realtor just told me two days ago that one of the major banks that she is dealing with told her they decided to go for all debts even primary residence. By that, she said they will not forgive the debt and will ask the owner to actually pay them the difference back. I have to admit that I did not drop everything to investigate this because I am not dealing with that specific bank. This is CA and a none recourse loan she's talking about.

The mortgage broker who has an office in our building explained to us on how different ways a short sale / foreclosure might affect the credit score - much depending on the credit score you currently have, whether the default is first, second, or ..,etc How long it will stay on your record is also very different depending on your specific situation.

As you can see, as nice as Steven is trying to give you the answers, things can be complicated and fluid, and you are dealing with such a big issue that it's very dangerous, in my mind, to take the answers and run with that.

I strongly suggest that you take the first route and find a good tax accountant and/or tax attorney that are familiar with this before you go forward.

Sylvia Barry
Marin Realtor
Web Reference:
1 vote Thank Flag Link Fri Sep 26, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA

Have you tried

It's a website for professional people looking for services from other professional people. It's worth a look and it may even connect you with the person your are looking for.

Good luck
1 vote Thank Flag Link Thu Sep 25, 2008
Hi Kiwisan, can you share a bit more detail as to your situation? If you like, send to me offline, or post for other comments.

Best Regards,

Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTOR® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist

Steven Anthony Real Estate & Financial Services
Expect Excellence. Get What You Expect.â„¢
Cell: 510.461.6011
1 vote Thank Flag Link Thu Sep 25, 2008
Kiwisan, thanks for sharing your situation with me offline and agreeing to having me post our interaction here in order to potentially help others in the same situation and have other professionals add to the discussion. -Steve:

-----Original Message-----
From: Kiwisan
Sent: Thursday, September 25, 2008 12:18 PM
Subject: Trulia Q..

Hi Steven,

This is "kiwisan" from Thank you for your reponse to my post earlier.
1) I have two rental properties in the Sacramento area. We may need to short sale/foreclose on one of the two properties but am concerned that the banks may come after our other rental property or even our primary residence here in the bay area.

Equity was taken out of the first rental to be put down on the second (so a possible short sale/foreclosure should be dealing with two different banks). My job relocated to the Bay Area and the mortgages are proving to be too much now.

2) If we short sale/foreclosed on both properties is that seen as "one event" (due to current financial hardship) or are we going to be "penalized twice" from a bank/credit agency stand point? (ie: 5 yrs for one foreclosure, now 10 yrs for both houses?)

3) Tax concerns: once properties are deed-in-lieu-of/foreclosed, when am I no longer responsible for property tax for the property?

I am seeking legal guidance on how to best handle this situation and whether someone with short sale/foreclosure experience can help us negotiate this w/the banks to rid our debt. Thanks for any advice.


Hi Kiwisan, first I'm sorry to hear of your situation and I hope the information below helps you navigate to the best solution possible for you and your family. Please keep in mind that I am not allowed to provide you legal advice, and you should not construe anything I am about to share as legal advice.

1) Regarding the rentals, whether Short-Sale or Foreclosure, you should know that either will probably result in a taxable event under the IRS "debt forgiveness" rule. Meaning, the banks will allow the sale, but you will be 1099'd for the difference, and the IRS will expect payment for this "phantom income." This would not apply if we were talking about your primary residence On 12/20/07 President Bush signed into law a bill passed by Congress: HR 3648 –Mortgage Forgiveness Debt Relief Act of 2007. One major point covered: Elimination of the “phantom tax” on foreclosures, short sales or other discharges of debt on a primary residence. Consider this scenario: A property is worth $250,000, and the mortgage balance is $300,000. Under the old rules, if a lender forgave the $50k difference as part of a foreclosure, short sale, refinance or loan modification, the borrower had to claim the $50k as income and pay federal income taxes on that amount. The new law eliminates this “phantom tax”, and the forgiven debt is no longer treated as taxable income to the borrower as long as certain requirements are met, such as the discharged mortgage balance must be on the taxpayer’s principal residence.

Going after the primary residence gets tricky. California is a non-recourse state, which normally means they can't come after your primary residence: Read more here:…

You might also consider trying to renegotiate your loan interested rate with the lender(s), but you will have to invest a considerable amount of time communicating with them.

2) You will be "penalized" twice from a credit perspective as each loan will show as an account that went into default. The affect on your actual score will last for two years; however, the derogatory note(s) that an underwriter will be able to see will last for 10 years.

3) Please refer to the Q&A link provided above.

I think it best to find a Real Estate/Tax Lawyer to help you. Try to zero-in on someone that you would like to work with.

Hope this helps. -SteveO
0 votes Thank Flag Link Fri Sep 26, 2008
Hi Kiwisan:

I know a few Real Estate Attorney in the North Bay Area. I know they can give you excellent recommendation on short sale/foreclosures and tax consequences for each.

Other agents on Trulia that are local will be able to help you also!

Please contact me if you need their info.

0 votes Thank Flag Link Thu Sep 25, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
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