Your HOME may be your biggest Asset or Liability. If you are going through a Divorce, your home may be one of the items that you need to consider in your property division. If you are confused about all the terms tossed around and are unsure about what options you have and what is best for your family….you are not alone! Below is a short attempt to provide some guidelines. HOWEVER – For your specific case, it is best you contact an attorney!
WHAT DETERMINES YOUR DESTINY?
YOUR DECISIONS! Your state of mind at a certain time determines the moment-to-moment decisions you make. Your beliefs determine your long term decisions and the direction you follow. Before I lose you, let me explain. Have you ever been in a frustrated and angry mood and someone you loved walked in the room only to suffer your snide remark? It had nothing to do with your child, husband, wife, significant other or parent, it was the state you were in – frustration and anger – which determined your choice to interpret their presence as interruption. By contrast, have you ever experience a moment of joy, listening to the waves of the ocean breaking onto the beach, your favorite piece of music, creating a master piece be it your car or your best cake recipe and, in that state, someone you love approached you? How did you treat them? I bet you interpreted their presence as love coming your way – and not as interruption.
Again, it was the state you were in.
Now that I tied this to your own personal experiences, let me explain that I only have your best interest at heart. I truly and genuinely believe that by extending an act of kindness to a stranger, you are the true recipient and whatever your linguistic representation of G-d is, reciprocates a thousand fold. So, I gathered my Attorney and my Realtor thinking hat, sat down for a while and wrote down this report so you can knowingly, intelligently and with options (yes, even when we think we don’t have options, we do), make the right decision for your family.
Bolt down your door, and don’t let go, until you read this ENTIRE report! Why?
- You will get in the habit of acquiring information that will get you closer to resolving your situation.
- If you learned one small detail that can benefit you, it was worth it.
- You will develop a muscle that you may have forgotten about, taking action!
It is a FREE article – And yet, 96% of the recipients of this report will never go beyond the second paragraph. They may have a belief that anything you get for FREE is worthless and yet isn’t the thing that makes life possible, the air you breathe, FREE? They may have a belief that I am trying to sell them something. You can let your guard down, I am not selling you any product, gismo, wonder pill or silver bullets. This report sole purpose is to empower you and guide you with some information which may shed light on your specific situation. Treat this process as if you were mining for gold, and you will be amazed at what you find. Not because I have all the answers, but more because by taking the time to read this, you are telling your own brain to look for the solution, and guess what, SEEK and you shall RECEIVE! SO DECIDE TODAY THAT YOU CONTROL YOUR LIFE AND TAKE MASSIVE ACTION! Results will follow.
So let’s examine some of your options:
There are many ways to lose your home, some of which destroy your credit, embarrasses your family, subject you to deficiency judgments, and exposes you to tax liability, such as Foreclosure. You could sit and wait for your Lender to Foreclose on the Mortgage, not knowing when you will be evicted out of your property OR you can decide to regain control of your life and live it on your own terms.
LOAN MODIFICATION WHAT IS THE SCOOP BEHIND IT?
Statistically, (Realty Trac) banks modified about 2% of all loans which were more than 60 days late. That speaks volumes about the Banks ability and willingness to modify your loan. Yes there are plenty companies out there charging TOP $$$ in the hopes of such modification, but the truth is that at the end of a very lengthy process, and after you front what is left of your depleted assets, your chances of obtaining such modification are statistically just the same 2%. You do the math. At the very least, I suggest that if you embark on the adventure, retain an attorney. Generally, they answer to a higher authority…. Before you contact one, do the leg work and go online searching your lender(s) web site for guidelines as to what supporting documentation the Lender requires. Prepare your documents, and call for an appointment. Your Lender will have the necessary information when reviewing your application and your attorney will know you are actively taking part in your rescue.
DEED-IN-LIEU OF FORECLOSURE
Your other alternative is to contact your lender and provide them with a Deed-in-Lieu of Foreclosure – in essence, deeding back the title of your property to the lender. Usually, it is provided to the First mortgage holder. So if you have more than one Mortgage, and the mortgage(s) are held by different lenders, you need to negotiate the terms of such a transaction so as to avoid the consequences of a Foreclosure (such as deficiency judgment, credit impact, tax consequences, etc.). Again, if you cannot afford to retain an attorney to negotiate the terms, at the very least it is advisable to have an attorney review the Lender(s) proposal so as to ensure that you understand and agree to the terms, as well as explain any possible adverse consequences.
THE SHORT STORY ON SHORT SALES
A Short sale, in comparison, is a process that in many cases cost you nothing. The Lender pays for most costs such as transfer fees, escrow, title, Realtor Commissions, etc., Your Lender agrees to take less than what is owed on the balance of your Mortgage. Similar to the Deed in Lieu process, you will need to negotiate the terms of the Short Sale. If you choose to retain a Realtor, they will act between you and the Lender, facilitate communication and take care of the sale aspects such as securing a Buyer. Please READ the proposed terms of Short Sale by the Lender and treat them as “proposal” so don’t feel compelled to “take it or leave it”. Suggest terms that are favorable to you, such as “no costs to owner”. Perhaps you can get “relocation costs”, “No deficiency” and other terms that suit your specific situation. As most Realtors do not have legal background, it is highly advisable to consult an Attorney.
Will your property qualify for short sale? If you are late with your mortgage payments, suffered a hardship such as loss of job, illness, Divorce and your property is upside down in value, than Short Sale is may be an option you should consider. Short sale takes place where your Lender accepts less than what is owed on the property. In other words, the bank agrees to take a loss on the mortgage(s) on your property. Why would the Bank agree to take LESS than what you owe on the mortgage? Simple… Banks are in the business of lending money to make money, they are not in the business of owning real estate. If you turned on your TV in the past 18 months, you probably noticed that your bank and other banks have more toxic mortgages than they know what to do with. So your bank, just as much as other banks, will agree to short sale your property If you provide them with the RIGHT information.
Yes, if you thought your troubles are over if you allowed the Bank to foreclose, THINK AGAIN. Of course, I cannot provide you with tax advice, so you should always consult your own accountant and attorney for your specific circumstances. The IRS could consider debt forgiveness as ordinary income, based on the deficiency amount, the difference between your debt and the amount your Lender was paid.
There are various exceptions pursuant to the Mortgage Forgiveness Relief Act of 2007. Some of the exceptions include:
- A bankruptcy discharge order of the deficiency.
- Insolvency – When your total liabilities are greater than your total assets at the time of the cancellation of the Debt.
- Non-recourse Loan – When the Lender does not have a legal right to collect Deficiency Judgment from any assets not pledged to secure the Loan.
- Investment Property that can be offset against business liabilities and expenses.
These exceptions are discussed in detail in IRS Publication 4681 which can be found here:
WHATEVER COURSE OF ACTIONS SUITS YOUR SPECIFIC CIRCUMSTANCES, IT ALL BOILS DOWN TO YOU TAKING CONTROL OF YOUR LIFE.
It really is as simple as making the decision that you are not willing to allow outside circumstances to control you. No matter what your outside environment is, you can still choose to believe that the best is yet to come – that whatever G-d (or whatever you think higher power is) has in store for you is only intended to exercise the muscles you already have, that his delays are not denials and you will come out stronger the other side.
[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]