shortsalegalaxy.com

New Foreclosure Tactic – 2nd Lein Holders Freezing Bank Accounts

Patty — Tue, 08 Dec 2009 17:46:34 +0000

It is hard to beleive that collection practices have gotten this out of control.

Second lien holders are, without notice, seizing homeowners
bank accounts, and getting away with it.

Taka a look at the full article here.

Even the IRS, goes through a “procedure” if they are going seize an account.
How can this happen? Hopefully this practice will get nipped in the bud.
Perhaps we can all share this among the many blogs and resources we all
subscribe to, in an effort to get the awareness going and this pracatice stopped.

Reflect on how much has changed within a few years–months even,
in the short sale business.

Originally a short sale resulted in a “full satisfaction” notification on a credit report.

Then, it changed to “satisfied for less than full balance”.

Next, deficiencies, 1099’s, promissory notes, collection practices and now freezing bank
accounts came into play.

What’s next, “bank ordered hits” on noteholders?

Although I am shocked at this newest approach, it does appear that the
court system is viewing this as more than intrusive by reversing these scenarios.

Good news, unless you are the homeomers trying to buy groceries.

Please don’t misunderstand– I do beleive that the entire mortgage crisis
points to dual culpability on the part of both banks and homeowners–
but there are just some things beyond the scope of decency–like freezing an
account wthout proper notice and without going through legal channels.

Even in all this market flux, short sales are still the best way for all
stakeholders to win:

Homeowners = Fresh Start and smaller credit hole out of which to crawl

Lenders = Larger return taking the short up front vs. REO (Why don’t they get this?)

Investors = Rewarded for up front risk, rehabbing, lanlording and revitalizing communities

Buyers = Get a below market deal with build in equity

Realtors = Fixes traditional selling issues-No commsiion fights, no picing issues,
no price reduction tug-of-wars, or worry about how the hosue shows

As Always….

Learn more at www.shortsalegalaxy.com

Please share this post and article it’s entirety if you pass on.

Controversial Attorney Tells “Underwater” Homeowners to Just Walk Away

Patty — Mon, 30 Nov 2009 14:55:09 +0000

Hello!

This interesting and controversial article shares the recent
thoughts of law professor/attorney Brent T. White from
the University of Arizona who believes that homeowners

are too caught up in the morality of not walking away from

their mortgages gone bad.

Full Article: Controversial Attorney Advice

He even goes so far as to say that homeowners can default
“strategically” by buying a car, or even a house before they
pull the plug on their mortgage.

I completely agree that the lenders have had major culpabililty
in this housing mess but nowhere in this article does it mention
short sale as a viable alternative. As we know, although short
sales can be tedious, so far it is the best win-win solution
that we’ve got.

The homeowner gets to actively participate on the “undoing”
of their mortgage which for may homeowners is an important
step in maintaining their dignity, the lender gets back some
of their money and the investor or end-buyer
gets a great deal.

So what are the consequences of just walking away?

The next post will share a list of states that are non-recourse
states, where the lender cannot sue the borrower for additional
funds after a loan is negotiated or repaid. It will also list “one-action”
states, meaning that the lender can only take one action regarding
a default, i.e., foreclose or sue for the outstanding funds,
but not both.

POLL!!

http://shortsalegalaxy.com/blog/

Tell me what you think about a homeowner walking
away by visiting my blog and filling out the poll.

As always…

If you want to learn more about short sales, doing them
yourself, or outsourcing, please visit www.shortsalegalaxy.com

Patty Burgess
www.shortsalegalaxy.com

TIP: Beware Short Sale Approval Letter Language

Patty — Tue, 22 Sep 2009 17:47:00 +0000

It is getting dicey—

Banks are playing hardball with short sale approval letter language
and it is happening an alarming rate. You need to be informed as to
what is happening if you are assisting homeowners with short sales.

There seemed to be a time when you could successfully argue for
full satisfaction of the mortgage with short sale lenders. We are
beginning to see more approvals using the word “discharge”, or
“lien release”. You may remember from my course or by studying
this industry that a lien release is nothing more than removing the
encumbrance from the property so that the property can be sold with
free and clear title. That does not release the homeowner from
responsibility for the shortfall. The Mortgage Debt Forgiveness Act
does not apply here.

To clear up some confusion regarding the Mortgage Debt Forgiveness Act
(extended to 2012), some verbiage from the IRS website is below.
This legislation only allows the remaining debt or shortfall to be forgiven
as it relates to taxable income, meaning that the shortfall on a debt cannot
be taxed as it has in the past.

From the IRS.gov Website…

If you owe a debt to someone else and they cancel or forgive that debt,
the canceled amount may be taxable. The Mortgage Debt Relief Act of
2007 generally allows taxpayers to exclude income from the discharge of
debt on their principal residence. Debt reduced through mortgage restructuring,
as well as mortgage debt forgiven in connection with a foreclosure,
qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012.
Up to $2 million of forgiven debt is eligible for this exclusion
($1 million if married filing separately). The exclusion does not apply if the
discharge is due to services performed for the lender or any other reason not
directly related to a decline in the home’s value or the taxpayer’s financial condition.

So, what this means is that a homeowner is covered by the debt relief act by
not having to pay income on the forgiven debt, but that DOES NOT mean that
banks aren’t going after some version of recovery of the debt.

There are several ways they are doing this now. Sometimes it is in the form
of a promissory note, only to be requested at the end of a of a long, laborious
short sale process. If you are an investor, or are a realtor working with an
investor, getting the investor to increase the offer slightly-if there is enough
margin, can make the lender back off on the promissory note. Investors who
can and will do this are a HUGE help to the homeowner here.

Lenders are also going after the homeowner by putting them into collections
for the shortfall. It is a pretty rotten thing to do after the short sale process,
but it is happening.

So, how do you protect yourself and your homeowner…..
DISCLOSURE!!! AND REFERRAL!!

What we know at this point is that it is still better to conduct a short sale
than to let a homeowner go to foreclosure–otherwise, they may be responsible
for the entire debt, vs. just the short. However, if you don’t fully disclose to
the homeowner what the ramifications are of conducting this transaction,
you really risk litigation yourself.

Make sure your “Seller’s Understanding, Waiver and Disclosure Form” is up
to date with the potential risks of a short sale.

Also make sure you have a good R.E. attorney, bankruptcy attorney and
accountant on your team for REFERRAL should you/your homeowner be
faced with these issues. Many homeowners who conduct a short sale, and
still have outstanding debt, do file bankruptcy after a short sale is completed.
This is something you may be asked about, but do make sure to refer and
not offer legal advice.

To learn more about protecting yourself and the homeowner, along with
insider tips, tricks and opportunities conducting short sales, visit:
www.ShortSaleGalaxy.com

Patty Burgess

www.ShortSaleGalaxy.com

Let’s Get Going!

Patty — Tue, 23 Jun 2009 22:43:58 +0000

Yikes! Where to start! In the ever-changing world of short sales, there is so much to know. For those who are in overwhelm, start with the basics, and plug into a system. Although each deal will be completely different, it’s the basics that will keep you sane.

The basics include a sytem that you can replicate on each componenent of a short sale. Your marketing should plug into a system, lead conversion, paperwork and the appointment needs a systen, as does the short sale submission, BPO, negotiation, and closing!

This is all easier than you might think getting started. The thing about short sales is getting enough in the pipline and not artifically inflating the importance of that one deal. Have you ever noticed that when you are busy working on several deals, the petty annoyances, don’t become major, unless you ARE living and dying on that one deal.

On the next post I will be talking about some of the greatest lead sources for deals that you might have overlooked or never considered in the first place. Once you put yourself out there , plug into a system , the deals will come–they have to, because you said so…

Get ready for some great lead sources, and watch your business grow!
Seeya!

Patty