Orlando Short Sale Expert | Orlando Short Sales, Orlando Short Sale Realtor / Agent

If a bank writes off debt in a short sale, it’s a “taxable event,” and the lender tells the Internal Revenue Service about the deal by submitting a “Form 1099-C, Cancellation of Debt” at the end of the year. Home sellers must acknowledge the amount when they fill out their federal taxes. Through Dec. 31, 2012, however, the federal government forgives any tax liability associated with forgiveness of a mortgage loan.

“In general, homeowners believe the government will extend this tax provision,” says San Diego Realtor Joy Bender. “However, as evidenced by the First Time Homebuyer Credit expiration in 2010, you can’t always count on the government to bail you out.”

The government generally considers forgiven debt to be income. If a seller has signed legal loan papers to take out a $200,000 mortgage and the lender accepts $100,000 in a short sale, for example, the seller received the equivalent of $100,000 in free money by government estimates. As a result, the IRS taxes it. For tax year 2012, however, the government still forgives the debt; in 2013, it might not.

The tax amount can be significant. On a debt of $100,000, a short-sale seller in the 25 percent tax bracket could end up owing $25,000 in income taxes.

Since short sales can take months and even fall through, homeowners considering a short sale may want to start the process sooner rather than later.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert and Foreclosure Specialist who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee  Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area.

Please visit:

Avoid Foreclosure / Short Sale Help  http://OrlandoShortSaleExpert.com, or http://ShortSellMyOrlandoHome.com

Our Website http://JerryLaRose.com or www.JerrySellsOrlando.com,  or http://OrlandoRealEstateVoice.com ,

If you’re a Buyer looking for Great Deals –  http://InvestmentPropertyDealsOrlando.com

Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake, Osceola and Brevard County Florida and Orlando, East Orlando, St. Cloud,  Davenport, Clermont, Longwood, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland,  Apopka,  Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent and realtor who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. The short sale process is complicated and we can help simplify it.

We also have now expanded to help homeowners to Stop Foreclosure in Brevard County Florida. Servicing Melbourne, Coco, Coco Beach, Satellite Beach, Palm Bay, Indian Harbour Beach, South Patrick Shores, Palm Shores, Rockledge, Cocoa West, Merritt Island, Port Saint John and Titusville Florida

Call us at 407-580-7011 or email at jerry@JerryLaRose.com  to find out more about Orange County Short Sales and Orlando Area Short Sales.

Orlando Short Sales, expert, specialist, Realtor, Keller Williams Realty, agent, broker, short sale, stop foreclosure

Since 2007, the Mortgage Debt Relief Act has allowed owners selling their homes through a short sale to do so without having to pay tax on the amount their mortgage holders forgave them.

The tax change means that if a house is sold for $75,000 less than what’s owed on the mortgage, the seller would owe federal income taxes on that amount. If the seller is in the 15% tax bracket, they would owe the IRS $11,250.  Some real estate analysts think doing away with the tax incentive will sabotage the government’s efforts to gradually move people out of homes they can no longer afford.  That will end in 2013, giving homeowners until the end of this year to get out from under their debt without facing tax consequences.  Tim Becker, director of the University of Florida’s Bergstrom Center for Real Estate, said the tax change may force some owners to walk away from their homes outright.  Letting the tax exemption expire doesn’t make sense and runs contrary to the government’s attempts to bring some financial stability to the housing market, Becker said.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert and Foreclosure Specialist who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee  Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area.

Please visit:

Avoid Foreclosure / Short Sale Help  http://OrlandoShortSaleExpert.com, or http://ShortSellMyOrlandoHome.com

Our Website http://JerryLaRose.com or www.JerrySellsOrlando.com,  or http://OrlandoRealEstateVoice.com ,

If you’re a Buyer looking for Great Deals –  http://InvestmentPropertyDealsOrlando.com

Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake, Osceola and Brevard County Florida and Orlando, East Orlando, St. Cloud,  Davenport, Clermont, Longwood, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland,  Apopka,  Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent and realtor who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. The short sale process is complicated and we can help simplify it.

We also have now expanded to help homeowners to Stop Foreclosure in Brevard County Florida. Servicing Melbourne, Coco, Coco Beach, Satellite Beach, Palm Bay, Indian Harbour Beach, South Patrick Shores, Palm Shores, Rockledge, Cocoa West, Merritt Island, Port Saint John and Titusville Florida

Call us at 407-580-7011 or email at jerry@JerryLaRose.com  to find out more about Orange County Short Sales and Orlando Area Short Sales.

Orlando Short Sales, expert, specialist, Realtor, Keller Williams Realty, agent, broker, short sale, stop foreclosure

According to RealtyTrac, short sales are increasing as a percentage of home sales in many states, helping some neighborhoods and homeowners avoid the more devastating impacts of foreclosures. The increases were sharper in some states, including California, Nevada, Michigan, Georgia and Colorado, the data show. In Colorado, short sales were 17% of all sales in the second quarter, up from 10% a year earlier. In California, they made up 25% of sales, vs. 18%.

Bank of America, the largest home mortgage servicer, expects to complete more than 100,000 short sales this year — more than double what it did in 2009, the bank says. Wells Fargo Senior Vice President J.K. Huey says short sales have been “steady to slightly” up in recent months, partly because there are fewer bank-owned houses for sale in some markets, and that has forced buyers to pursue more short-sale properties.

In the second quarter, short-sale homes sold at a 21% discount to non-foreclosure homes, while bank-owned homes went at a 40% discount, RealtyTrac says. Short sales may also reduce losses for loan owners because they avoid full foreclosure costs. Borrowers may qualify for new mortgages sooner after a short sale than after a foreclosure. Short sales peaked at 16% of the market in early 2009, RealtyTrac says. Realtors say there should be more short sales and that they should get done faster.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert and Foreclosure Specialist who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area.
Please visit:
Avoid Foreclosure / Short Sale Help http://OrlandoShortSaleExpert.com, or http://ShortSellMyOrlandoHome.com
Our Website http://JerryLaRose.com or www.JerrySellsOrlando.com, or http://OrlandoRealEstateVoice.com ,
If you’re a Buyer looking for Great Deals – http://InvestmentPropertyDealsOrlando.com
Please give me a call if you have questions about the Orlando and Central Florida real estate market.
P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake, Osceola and Brevard County Florida and Orlando, East Orlando, St. Cloud, Davenport, Clermont, Longwood, Windermere, Winter Garden, Kissimmee, Winter Park, Altamonte Springs, Maitland, Apopka, Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent and realtor who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. The short sale process is complicated and we can help simplify it.
We also have now expanded to help homeowners to Stop Foreclosure in Brevard County Florida. Servicing Melbourne, Coco, Coco Beach, Satellite Beach, Palm Bay, Indian Harbour Beach, South Patrick Shores, Palm Shores, Rockledge, Cocoa West, Merritt Island, Port Saint John and Titusville Florida
Call us at 407-580-7011 or email at jerry@JerryLaRose.com to find out more about Orange County Short Sales and Orlando Area Short Sales.
Orlando Short Sales, expert, specialist, Realtor, Keller Williams Realty, agent, broker, short sale, stop foreclosure

Roughly sixty percent of the Orlando homes for sale on today’s market are Orlando short sales and Orlando foreclosures! Distressed properties are well known for their value (a reputation which is sometimes accurate, and sometimes not), but they also have a reputation for causing buyers to become distressed, too!

Transactional snafus, last-minute surprises and long, drawn-out escrows that never close seem to be par for the course. Instead of avoiding these properties altogether, get educated about the most common dramas that go down in these deals, and how you can avoid falling victim.
1. Run-on (and on, and on) escrows. When you’re buying a home (or selling one, for that matter), time is absolutely of the essence. And buyers reasonably expect that the big time suck in Orlando real estate is in the house hunting process itself; seems like once you find a Orlando home you want to buy and the seller agrees to your price and terms, things should move pretty quickly, right?
Not so much, when it comes to some distressed property sales. I’ve heard tell of the occasional, swiftly-moving escrow on an REO (real estate owned – by the bank). But for the most part, these transactions take anywhere from a few days to a few weeks longer than “regular” sales, because of the extra signatures, supervisor-level approvals and even investor involvement required to seal the deal. Banks don’t have the same sense of urgency individual home sellers do, and it’s not uncommon for the people who need to sign on the dotted line to be on vacation or scattered across the country, adding days’ or weeks’ worth of time to the escrow.
And Orlando, Fl. short sales are also an entirely different animal when it comes to escrow timelines. While a standard sale from an individual seller to an individual buyer might take 45 days from contract to closing, a short sale can take anywhere from 45 days to 6 or 8 months (!) to get the deal closed, after the seller has accepted the contract.
Avoid the drama by: expecting your escrow to run long, and being pleasantly surprised if it doesn’t. Expectation management is everything. Make sure you take these extended timelines into account when you’re working with your mortgage broker on the issue of when to lock your interest rate, and how long your rate locks will last. You might even need to plan on and/or set aside an allowance for the cost of extending your low interest rate, if rates are rising rapidly during the time you’re waiting for the deal to be done.
2. Bank won’t take lowball offer. If I had a dollar for every time I’ve received a question from an outraged reader to the effect that a buyer has had their Orlando short sale or Orlando REO offer rejected on grounds that it was too low, even though the bank has no other offers.
Banks owe their shareholders and investors a duty to get as much as they can for these properties. Just because you see it’s on the market and listed as a Orlando short sale or a Orlando foreclosure doesn’t mean they’re going to give it to you for a fraction of its worth. The bank’s goal is to get a purchase price as close as possible to the home’s fair market value, as determined by the recent sales prices of similar, nearby homes, with some adjustments made for the property’s condition. Fact is, many banks would rather see the listing agent reduce the price by a moderate amount, and wait to see what offers come in, than to accept an offer 30 percent below the asking price just because there are no other offers on the table.
Avoid the drama by: working with your agent to make a realistic offer, based on recent comparable sales in the neighborhood, not just on what you think you can get away with. You can waste a lot of time, spin a lot of wheels and lose out on a lot of properties making lowball offer after lowball offer on distressed homes. Sit down with your broker or agent, review the ‘comps’ and make a smart offer that reflects a good value for you, is within your budget and is not bizarrely out of the realm of the fair market value of the property.
3. Last minute postponements/cancellations. These transactions have an uncanny way of being delayed at the last minute – or never going through at all, through no fault of the wanna-be buyer. You signed docs yesterday, put your dog in the crate this morning and just hopped in the moving truck, only to get a text from your broker that the deal didn’t close because the escrow company which was selected by the bank flubbed the checkboxes on a single sheet of paper (it happens). Or, you’ve been in contract (with the seller) on a short sale for four months, and the bank refuses the sale entirely because the seller refuses to kick even $1 of their own cash into the deal, despite having a flush savings account.
Avoid the drama by: staying as flexible as possible with your moving plans as long as possible. Best practice is to plan on some overlap between the time you can be in your last place and your scheduled move-in date. Also, if you’re in contract on a short sale, you should take the point of view that you don’t have a firm deal until you get the bank’s approval of the transaction. So don’t even think about starting to make moving plans or paying for home inspections and appraisals until you know the bank has green light the deal and that the purchase price and terms they’ve approved work for both you and the seller.
4. The bank’s black box. Make an offer on a normal home and you’re likely to know what the outcome will be within a few hours or a few days, at the outside. If things take longer because the seller is out of town or some such, the listing agent tells you that, and you at least know what’s going on.
Make an offer on a Orlando bank-owned property or a Orlando short sale? It’s a crap shoot – could be days, but could also, easily, be weeks or months before you know what’s going on. And no amount of calling, pleading, prodding or nudging is likely to get you much information on how your offer or the seller’s short sale application is being handled or what (if any) progress is being made. And that “black box” into which your offer disappears at the bank level is very frustrating.
Avoid the drama by: continuing your house hunt until you have an answer back. Maniacally pestering the listing agent for answers or harassing your buyer’s broker into spending hours on hold with the bank is highly unlikely to get you any insight. (With that said, it does make sense for your agent to check in regularly – sometimes even daily – with a short sale or REO listing agent to stay updated on any developments with the property and to make sure your offer/transaction stays in the front of their mind.)
Most of the angst in these situations arises when a buyer feels they passed on properties that would have really worked for them when they pinned their hopes on a distressed home. You can only control your efforts and activities, not the bank’s. So, consult with your own broker or agent about staying proactive in viewing and even pursuing other properties until you have a firm “yes” from the bank on your Orlando short sale or Orlando REO offer. Until that time, and usually for a short time after you get the bank’s approval, you have the right to back out of the transaction if you need to (make sure your broker briefs you on precisely when your right to rescind your offer or exercise contingencies – i.e., bail – will expire).
5. Double standards. In a “regular” equity sale with no bank involvement, both buyer and seller are obligated to meet various timelines. Seller has to provide disclosures by X date, open the property to inspections – with utilities on – by Y, and close and move out by Z. Orlando REO and Orlando short sale buyers, on the other hand, are often dismayed to find that even though the bank might take weeks or months to sign or handle its deliverables, the bank will insist that the buyer show up, sign or send a check quick-like.
Avoid the drama by: chalking it up to the (admittedly irritating) way things are – the price you pay to buy from the bank. Realize that working with the bank on the bank’s terms is unavoidable when you buy a distressed property. Then, go into the deal with realistic expectations – including the expectation that the bank will drag its feet, despite expecting you to keep every deadline – and you’ll be less frustrated, and less likely to make poor decisions out of frustration.
Also, make sure you do respond in a timely manner to the bank’s requests and your obligations under the contract. I’ve seen banks capitalize on buyer delays in returning signatures and removing contingencies to accept higher offers they received in the interim. Don’t lose your home on a technicality because you assume that the bank’s lackadaisical timelines apply to you as well.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area.
Please visit:
Avoid Foreclosure / Short Sale Help http://OrlandoShortSaleExpert.com, or http://ShortSellMyOrlandoHome.com
Our Website http://JerryLaRose.com or www.JerrySellsOrlando.com, or http://OrlandoRealEstateVoice.com ,
If you’re a Buyer looking for Great Deals – http://InvestmentPropertyDealsOrlando.com
Please give me a call if you have questions about the Orlando and Central Florida real estate market.
P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake or Osceola County Florida and Orlando, East Orlando, St. Cloud, Davenport, Clermont, Longwood, Windermere, Winter Garden, Kissimmee, Winter Park, Altamonte Springs, Maitland, Apopka, Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. The short sale process is complicated and we can help simplify it.
Call us at 407-580-7011 or email at jerry@JerryLaRose.com to find out more about Orange County Short Sales and Orlando Area Short Sales.

On April 12, 2011, a new law was introduced in the U.S. Congress by Representatives Tom Rooney (R-FL) and Robert Andrews (D-NJ) known as the “Prompt Decision for Qualification for Short Sale Act of 2011″. The law will require lenders to give an approval, disapproval, or a status on approval of a short sale within 45 days. While the law does not require a 45 day time limit to be met (the lender can ask for additional information), it does place some obligation on the lender to respond. This law is not a cure all, but could be a good step in getting communication going between a negotiating lender and the seller.

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” said National Association of Realtors (NAR) President Ron Phipps. “Realtors and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale.

After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps. NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13% of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area.

Please visit:

Avoid Foreclosure / Short Sale Help http://OrlandoShortSaleExpert.com, or http://ShortSellMyOrlandoHome.com

Our Website http://JerryLaRose.com or www.JerrySellsOrlando.com, or http://OrlandoRealEstateVoice.com ,

If you’re a Buyer looking for Great Deals – http://InvestmentPropertyDealsOrlando.com

Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake or Osceola County Florida and Orlando, East Orlando, St. Cloud, Davenport, Clermont, Longwood, Windermere, Winter Garden, Kissimmee, Winter Park, Altamonte Springs, Maitland, Apopka, Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. The short sale process is complicated and we can help simplify it.

Call us at 407-580-7011 or email at jerry@JerryLaRose.com to find out more about Orange County Short Sales and Orlando Area Short Sales.

ORLANDO, Fla. – July 6, 2010 – With more than half of the Central Florida’s homeowners owing more for their homes than the properties are worth, the question for some has become: How do I get out of this?

Of all the existing-home sales reported by Realtors in the core Orlando market in May, 23 percent were short sales. They are called “short” sales because the sales price come up “short” of, or less than, the amount owed on the mortgage.

What these homeowners, whose loans are “underwater,” may not realize is that they could successfully complete a short sale of their house but then face a lawsuit from their lender for not paying off the entire loan, a shortfall known as a “deficiency.”

At particular risk of being hit with such a debt judgment are owners of second homes and investment properties, homeowners who haven’t faced any kind of financial hardship, and owners who have a second mortgage.

“That’s going to be a huge problem moving forward in the next few years,” said Orlando lawyer Matt Englett, who specializes in home foreclosures. “These people who use Realtors to advise them on the transactions can end up facing deficiencies, and the deficiency notes will go to third-party collections agencies, and they will start suing and progressively pursuing those people.”

Homeowners have several options if they wish to avoid getting calls and lawsuits from debt collectors.

In a mortgage document called the “payoff letter,” a lender may include a blanket provision stating that it reserves the right to sue the seller at any time for unpaid mortgage debt. At the very least, Englett said, sellers need to make sure they do not give lenders that right.

Some lenders, particularly smaller ones, have been willing to state just the opposite — that they will not pursue any mortgage debt from the seller, he added.

Simply asking the lenders to cooperate by removing any wording about collections isn’t enough, Englett said. The seller is usually faced with building a case that details errors and omissions made by the lender in its mortgage documents, to gain leverage and force the lender to forgive the debt.

A new option that emerged in June is a federal program that calls on banks to forgive some of the mortgage debt of certain, qualified short-sale sellers. To qualify, sellers must:

Meet the criteria of the federal government’s Home Affordable Modification Program.

Have the house as their primary residence.

Face a financial hardship, and their mortgage payment must be more than 31 percent of their gross income.

The new program makes short sales a good option for homeowners facing a financial hardship, though it’s not meant for homeowners who can afford their mortgage but want to walk away from an upside-down loan, said Frank Rubino, vice president of the Chase Homeownership Center in Orlando.

“It’s not right. It’s not moral. It’s not the right thing to do,” Rubino said. “Why should customers look to the bank to substantiate a loss for the house they bought? … If they bought the house and sold it for $100,000 more than they paid, they wouldn’t share those profits with the bank.”

The decision of whether to pursue a former homeowner for outstanding debt varies from mortgage servicer to mortgage servicer, Rubino said, and can hinge on such things as whether the customer mismanaged his or her finances.

Sellers with a second mortgage face particular challenges if they try to walk away from a short sale without any remaining debt.

Banks usually have five years in which to file a deficiency judgment, but they can sell it to a third-party collection agency — “and the collection firms can chase you down for 20 years.

In cases where the seller has a second mortgage or can’t qualify for the federal programs, I would direct  you to a real estate lawyer and a tax adviser.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee  Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake  or Osceola County Florida and Orlando, East Orlando, St. Cloud,  Davenport, Clermont, Longwood, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland,  Apopka,  Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.

Effective today, the short sale process is simplified. The only problem: Many lenders don’t know it, and Realtors may have to convince them.

The Home Affordable Foreclosure Alternatives (HAFA) program gives $3,000 to borrowers for relocation assistance, $1,500 to servicers for administrative and processing costs, and up to $2,000 to investors who allow up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. The program was created to help stabilize distressed inventory such as underwater homes.

Some lenders have already adopted HAFA rules, but April 5 was the deadline for participating servicers to implement HAFA. The program reportedly covers servicers handling more than 90 percent of all mortgages.

However, the National Association of Realtors (NAR) says that it’s already hearing complaints from members. Many servicers say they haven’t even heard about the program, Realtors claim, so it’s clear that they won’t “hit the ground running.”

NAR says it will carefully monitor HAFA implementation and report delays and other program problems to the Treasury Department. However, “patience will be needed.” Realtors can negotiate faster short sales by urging lenders to comply with the new procedures and deadlines.

NAR offers a webpage with information on how HAFA works at: www.realtor.org/shortsales.

NAR also offers other short-sale info (including links to a 45 minute Webinar and a 15 minute video on a separate webpage: http://www.realtor.org/realtors/basics_short_sales?wt.mc_id=rd0041.

NAR also produced a four-page HAFA informational brochure.

U.S. Treasury Department guidelines and forms (updated March 26, 2010):
https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland, Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.

A common question I often get is: “Why would a bank or lender agree to a short sale?”

Let’s look at an example…

The seller of a home owes 200k on a property where the best offer was only 160K. The reason why could be almost anything…lack of curb appeal, cost of repairs, old house, today’s slow market?

What are the seller’s choices? The homeowner can sell for 160K and bring 40K to close the deal because the loan is upside down. Or the buyer and seller can work together to negotiate a short sale.

Obviously, if the seller doesn’t have 40K to bring to the table at closing, the deal’s not going to get done. Even if they do, does it really make sense to toss in 40K without seeing if the bank will take less?

Of course, it takes a great deal MORE than a phone call to get a bank to agree to taking a loss, no matter what the number.

Banks actually don’t want to take houses to foreclosure because they don’t want to have to worry about selling residential real estate; after all, they’re financial institutions, not real estate brokerages. Being heavily regulated by the federal government, banks can only have so many bad debts on their books. A foreclosed property represents a “non-performing asset” that ties up money, hurting profitability.

For this reason, doing a short sale on a property in foreclosure is the PREFERRED method used by banks to liquidate property.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden,  Kissimmee or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales

If only the President’s foreclosure-prevention plan worked as well as “cash for clunkers”. But it hasn’t. When the Administration announced the Making Homes Affordable plan in February of 2009, officials said they hoped it would help 4 million distressed homeowners to stay in their homes and we all know that we need much of that help here in Orlando. The Administration has acknowledged that there are only 200,000 trial loan modifications under way.

Clearly, lenders have been reluctant to modify loans. (Moreover, there are good reasons for their reluctance according to a recent study by the Boston Federal Reserve.) Also, many borrowers have turned out to be ineligible for the programs or – because they are so far ‘under water’ – uninterested, especially in the Central Florida / Orlando area. Whatever the cause, the result is the same: a distressed borrower typically needs to choose between (1) a short sale (where the lender agrees to take less than the amount owed) in which, among other things, a commission (paid by the lender) is generated. (2) a foreclosure, or (3) a deed in lieu of foreclosure (where the borrower ‘gives back’ the property to the lender without a foreclosure proceeding). Which is better for the borrower?

Many real estate agents will say and advertise that a short sale is clearly preferable. In support of this view, two claims are usually asserted. (1) A short sale is less damaging to the borrower’s credit than a foreclosure. (2) A short sale provides the borrower with a shorter ‘waiting period’ until the borrower will be able to purchase a home again.

It is important to note that these are two different claims. For example, in a period of time a borrower could become eligible for a purchase loan under Fannie Mae/Freddie Mac guidelines, but he or she might still not have sufficient credit or income to qualify for the loan.

While many say that a short sale is less damaging to one’s credit than is a foreclosure, documenting that claim is another story. I can’t find any verification from Fair Issac (the developer of the FICO scoring system) or any of the major credit providers. That is probably no surprise, because their systems are proprietary. Nonetheless, one wonders what might be the source of the claim.

Moving on from the credit score issue, there is the question of being again eligible to buy. More precisely, it is a question of when, in the future, the defaulting borrower could get a loan that would be purchased by Fannie Mae or Freddie Mac. The issue is dealt with in Fannie Mae Announcement 08-16, released June 25, 2008.

When it comes to foreclosures and deeds in lieu of foreclosure, the policy distinguishes between events that were precipitated by extenuating circumstances (e.g. job loss, major illness) and those that were not (e.g. financial mismanagement). If you’ve had a foreclosure without extenuating circumstances, you can’t purchase with a Fannie Mae – backed loan for five years. However, if there were extenuating circumstances, it drops to three years. Suppose you chose the deed in lieu of foreclosure option. If there were no extenuating circumstances, the period would be four years, but with such circumstances, it drops to two. Fannie Mae doesn’t draw the distinction when it comes to short sales: the period is two years, the same as doing a deed in lieu with extenuating circumstances.

May 15, 2009, the Treasury Department issued an update to the Making Home Affordable plan. Among other things, it provides for financial incentives (e.g. a $1,500 moving allowance) to distressed borrowers who meet the general eligibility requirements for a loan modification and who will engage in an approved short sale or who will give a deed in lieu of foreclosure.

Distressed and underwater borrowers face a minefield of options for resolving their problems. Not the least of their problems is the vast amount of misinformation floating around. They need to step very carefully.

For further details on this issue please feel free to e-mail me or give me a call at 407-580-7011.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit www.JerrySellsOrlando.com for your real estate needs. Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange County Florida and Orlando, Windermere, Winter Garden, or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.

I get numerous questions weekly in regards to whether or not to Short Sell a property in the Orlando area. So, I want to post the latest question I just received and the response that I sent. Perhaps that will help when you are considering short selling your Orlando area property.

Question:

            Our hardship is that my husband and I wanted to sell the house and we can’t due to the drop in price. Our mortgage is for $242,000 and our house is currently value at about a third or a fourth of the mortgage we owe. I am still making payments on the house but we do not need the house anymore as we are not living in Florida. Due to the drop in price, we are unable to sell it, but since we do not want to ruin our credit, we are still making payment on the house. Is there a way I could short sale the house, without stop making payments on the house?

 We are current in our payments. We pay about $1700 a month, but my loan is 5/1 ARM Interest only. We have had the mortgage for 3 years (Since 7/2006), so until 7/2011, it will be interest only and I do not want to imagine what will happen, once the mortgage changes to a variable rate.

 Financially speaking, we can afford the monthly payments for now, but within the next year or so, we will be buying a house in NY and we wont be able to pay 2 houses.

Please advise.

 Answer:

One of the main considerations for a short sale is the fact that you can’t afford it. If your monthly debt’s outweigh your monthly income then you should qualify. If they aren’t then they’ll probably say no to it. You did not indicate the lender. You’ll probably want to call them and ask them their advise. Every lender that I’ve dealt with will not consider a short sale if you are current on your payments. They essentially will not accept a short sale if you’re current. again, call your lender and try to find out. My experience is no.

              In regards to not wanting to ruin your credit, well if the lender will not accept a short sale if you’re current, then you have no other option. I do not know exactly how it will affect your credit score, my previous clients are telling me between 100 – 200 point drop in score.

However, since a short sale will eventually be settled and sold this will be recorded on your credit score as settled debt for less than full  amount. I am hearing that your credit score will probably rebound to it’s current level in as short as 2 years. Also fannie mae says that you can purchase another home after approx. 2 years vs. a foreclosure it’s 5 years.

So, you have to ask yourself, do you want to take a hit for 2 years on your credit score and be done with this property or do you want to hang on to it for the next 10-15 years until such time that the market recovers to a point where you can breakeven.  That’s your ultimate question. You decide. Please let me know if I can answer any other questions.

Thanks

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden,  Kissimmee or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.