Real Estate Short Sales in the News...

This week real estate short sales appeared in the news a few times. Here are just a few article from the recent week discussing short sales.

This one is from the Columbus Dispatch where are consumer wrote in their question:

Q: We need to get out from under a lot of debt, including our home mortgage and homeequity line of credit. What happens if we sell but can’t pay off both mortgages?

A: If you want to sell your property, you’ll have to come to the closing table with enough cash to pay all the debt, plus closing costs and fees. The closing costs might include a broker’s commission, transfer taxes and title charges, among others. Closing costs, including a broker’s commission, can run from 8 percent to 10 percent of the price.

If you have little cash and owe more than the property is worth, you can ask the lender to do a short sale on the property, which means the lender will accept whatever cash you get from the sale in full payment of the loan.

That might sound good, but there are a couple of issues: First, if you do a short sale, the Internal Revenue Service will consider the amount the lender forgives you as income. You could face a tax bill for the amount you didn’t repay.

For example, if you sell your home for $50,000 less than the mortgaged amount, the IRS would consider the $50,000 not repaid as income to you. When you’re calculating next year’s tax bill, you’ll have to inflate your income by about $50,000. Depending on your income, that phantom $50,000 could push you into a much higher tax bracket.

Second, the lender might not accept a short sale. In that case, you would still owe whatever part of the debt wasn’t paid off by the sale.

Then there is this interesting article from the St. Paul Pioneer Press that point to scary statistic.

50% of home owners who lose their homes never have contact with their mortgage loan company once they fall behind.

The article goes on to describe what lenders are doing about this problem and discuss short sales in this brief statement:

or a short sale, in which they find a buyer for the house and then work out the difference between the sale price and the amount the homeowner owes with the servicer.

What we can see is that most people are afraid or in denial of their situation when they get behind on mortgage payments and are possibly utheir on thier home. This is where we at short-sale.com will provide assistance in a simple, private manner.