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Mortgage Foreclosure Article
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Learning About Foreclosure & Short Sale
from:Foreclosure on a home is a devastating process for the homeowner. They often feel that all their life-long dreams of home ownership are going down the drain. For whatever reason, they are no longer able to make the payments on their home so the home is in foreclosure. When a home is in foreclosure, the lender is selling the home at public auction where the highest bidder gets the home. Sometimes as an alternative to the actual foreclosure, short sale may take place.
A foreclosure short sale may take place if the lender agrees to sell the home for less than what is owed to the bank. The bank accepts a discounted payoff and releases the mortgage. However, many times the bank will list the home as a foreclosure short sale, but they may not accept the offer given by the new buyer. A home may not actually be in foreclosure for a lender to offer a short sale. If the value of the home has fallen way below what is owed on the mortgage, the lender may consider a short sale as an attempt to bring the price of the home in line with market value.
Although to avoid a foreclosure, short sales are often accepted, there are circumstances where the lender may not want to accept a short sale. In some circumstances, the lender will come out ahead if they go through with the foreclosure. This may be the case when the value of the home is much higher than what is owed on the mortgage. In a situation such as this, the lender may be able to sell the home for less than it's worth but still be over what is owed on the mortgage.
If you are a buyer looking for a cheap home to buy, be aware of the negatives involved in a pre-foreclosure short sale. You may see a home on the market that seems to be too good to be true. Check with a real estate agency to see if the home is a short sale. The lender may not accept your offer and short sales are seldom simple to complete, often taking months to complete.
A foreclosure short sale may seem like the answer to the homeowner facing the loss of their home. They will have the opportunity to be out of debt, but there are also consequences to a short sale. The largest consequence is the tax liability that may fall on the seller (homeowner). The lender has to notify the IRS of any taxable sales and they may give you a 1099 for the amount they were shorted. Although the Mortgage Forgiveness Debt Relief Act of 2007 forgives many debts in foreclosures, some of the dollar amounts are exempt from this act.
Before you get too excited about a short sale, contact a lawyer to find out your possible tax liability. Another negative about a pre-foreclosure short sale is what it does to your credit rating. It will show up even more negatively on your credit report than a foreclosure. So consider all options when your home is facing foreclosure.
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Mortgage Foreclosure Specific links
Mortgage Foreclosure News
Foreclosures Dropped in February, Helped by Rescue Programs and Poor Weather - Money Morning
 Los Angeles Times | Foreclosures Dropped in February, Helped by Rescue Programs and Poor Weather Money Morning US mortgage foreclosure filings dropped for the second straight month in February and posted the smallest ... RPT-US foreclosures drop 2nd straight month in Feb-RealtyTrac US Mortgage Foreclosures grow by 6% in February Weather, Mortgage Redos Slow Foreclosure Filings in February |
Woman loses parrot, has house ransacked by Bank of America in mortgage ... - New York Daily News
 New York Daily News | Woman loses parrot, has house ransacked by Bank of America in mortgage ... New York Daily News Angela Iannelli of Gibsonia, Pa., is suing bank of America for taking her parrot and ransacking her home as part of a mistaken foreclosure. ... New bank tactic - foreclose first, ask questions later Bank of America Apologized for Accidentally Repossessing Home Bank Sorry for Taking Parrot |
Real-estate law: Use foreclosure time as your rebuilding season - Orlando Sentinel
Real-estate law: Use foreclosure time as your rebuilding season Orlando Sentinel ... foreclosure in the past few years and are going through it now, the government could pass some sort of program or alteration to traditional mortgage ... Obama plan creates short sale incentives next month Give readers a mortgage program scorecard Home Foreclosure Rates Slackened in February, But Misery Remains |
Shorts Sales Are The New Foreclosure – Interest Rates Lower - Best Syndication
 The Guardian | Shorts Sales Are The New Foreclosure – Interest Rates Lower Best Syndication Freddy Mac announced today that 30-year fixed mortgage rates are down again to just 4.95 percent. Points and fees are unchanged at .7. ... Obama Refinance Plan – Mortgage Debt Problems Cause Relief Programs Mortgage rates stay below 5% Obama Refinance Plan – Get Help with Mortgage Debt Relief in March 2010 |
Short sales become foreclosure alternative | Philadelphia Inquirer | 03/11/2010 - Philadelphia Inquirer
 Credit.com News | Short sales become foreclosure alternative | Philadelphia Inquirer | 03/11/2010 Philadelphia Inquirer ... short-sale program is the administration's acknowledgment that its current mortgage-modification effort "can't solve the foreclosure problem by itself. ... New government program makes 'short sale' more appealing Obama Short Sale Plan Avoids Foreclosure with Less Debt HAFA is Buffer Enough Against Short Sale Fraud: Treasury |