Posted August 7th, 2009
Thanks you so much !
I really appreciate ur quick response. Its really a grt help!
Have a grt weekend
Joel:
Most likely you will get a 1099C for the amount the bank lost. However, if the property is your primary residence IRS Form 982 will get you out of payment. Talk to your accountant about that. Let me know if this helps.
Sincerely,
Oscar
Thank u so much!!!
i hVe another question , i owe d bank $ 560,000.00 n they will settle for $ 312,000.00 . My question is, will d difference will go under my income at d end of d year? And pay taxes? Or am i covered under Forgiven Law?
Thanks n happy friday!
Joel
Joel:
Thanks for contacting me about your short sale questions. The quick answer is, depending on your state, most likely, if the second mortgage is a result of a refi, cash out or line of credit, then they will go after you. Better to take the release of lien with you owing them than having them try to suit you. You can probably later settle the release of lien for a lot less. Might as well avoid the foreclosure. Here is an article for you.
Does this help?
Oscar
Name: Joel
Address:
I need an advice. Im in the process of short sale, my first approved the sale but my secoond denied it. my second wants me to pay the remaning balance at first, but my realtor negotiate. now the options they gave me was to pay 25000.00 and d deal is close. option 2 is pay 4200.00 to release the lein and pay the remaining 37,000.00 aferwards..
both options are impossible, and am not doing it.
whats going to happen if i close escrow wwithout paying them the $37,000.00 afterwards? can they sue me or run after me?
whats my best options? thanks…
if i foreclosed can my second run after me still?
Posted May 15th, 2009
By Cheyenne Hopkins, American Banker
The centerpiece of a plan the Treasury announced in February has been a program to reduce borrowers’ monthly mortgage payments to 31% of the borrower’s income.
But on Thursday, Treasury Secretary Timothy Geithner announced a plan to provide incentives to borrowers and servicers to pursue a short sale or deed in lieu of foreclosure if a borrower is eligible for the modification program but does not qualify under criteria tied to the loan’s net present value.
That proposal brought swift criticism from some consumer groups, which said the administration is moving in the wrong direction.
"The government should not be out there encouraging and incentivizing foreclosures," said Bruce Marks, the chief executive officer of the Neighborhood Assistance Corp. of America. "A short sale or deed in lieu is just a faster process to foreclosure."
The plan would give $1,000 to servicers that complete a short sale or deed in lieu and $1,500 to borrowers to help with relocation expenses.
In a short sale, a borrower sells the property at its current value, even if the sale brings less than the total amount owed on the mortgage. For a deed in lieu, a borrower voluntarily transfers ownership of the property to the servicer if the title is free and clear.
The plan provides a streamlined approach to pursuing a short sale, including allowing borrowers 90 days or more to market and sell the property, and steps for appraising the property.
Some observers argued that the administration is doing the right thing, because a short sale or deed in lieu would still be preferable to a foreclosure.
"They are not pushing a short sale over a modification," said Pete Mills, a consultant for Potomac Partners. "They are pushing a short sale where a mod is not possible or where the borrower fails the mod, such as they stop making payments. … It is a better option than a foreclosure from a future credit standpoint."
Terry Moore, managing director of North America banking for Accenture Ltd., said it was unclear if the program would be effective.
"It’s an open question as to whether the incentives will be sufficient for lenders to embrace the program. From a consumer perspective, it’s positive," Moore said.
One downside could be to make the foreclosure prevention plan even more complicated for servicers. "It definitely adds complexity," Moore said. "This is coming as servicers are overwhelmed not just with modifications, but foreclosures and shorts sales and it’s just one more thing that needs the right structure, operations and reporting to make it effective. It adds complexity to the mix in an overworked environment."
The Treasury said that lenders and servicers have offered more than 55,000 modifications to borrowers since the program began, and that 2,150 refinancings have been enacted.
The two departments also announced details on a $10 billion guarantee program that provides incentives for modifications when home prices decline.
That plan calls for offering guarantees of up to 50% if lenders agree to a systematic modification and the borrower completes a trial modification period. The program would provide incentives each month for up to 24 months if the home’s price and the average cost of a home in that market both declined.
Posted May 5th, 2009
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The Phone Tool. Dominating the phone is critical. It is when you talk to someone over the phone that you get your chance. You have to be quick at proposing your service effectively. Are you proposing a listing, short sale, loan mod, etc.? You have a few golden seconds to do it. That is it. In this webinar we will focus on this!
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Posted February 3rd, 2009
Roberta:
Thanks for your interest in Short Sales A-Z. Short Sales A-Z course is only $250. No follow up cost.
This is my opinion about your question. There are a lot of dream sellers. I am not accusing the person you are considering working with of misguiding you. Be sure you are getting what you are paying for. If they truly help you through everything and set you up so you can keep doing business for a long time, then they are worth it. If you are going to pay a high monthly fee, be far away in another state, and put everything as if it is up to you, then you are over paying. When I got started I got charged for such a program. I learned my lesson. So be very selective.
My course Short Sales A-Z is one of the best if not the best out there. Look at the testimonials. My testimonials include last name, city and credentials. Not only that, it is well priced. Short Sales A-Z is a course exactly about how to execute short sales. Very detailed. In five hours you get thought the whole course, which is in graphically rich, packed with document samples video. You can look at the whole course outline HERE. The course is exclusive about the doing a short sale. It does not include marketing. That is another subject.
My recommendation is to sure you know what you are getting. It needs to be specific. Don’t get emotional about the sale. Be careful with dream sellers. Don’t think that the more expensive the better. There are individuals trying to take advantage of people that are inexperienced about real estate. The real estate market is extremely variable. Short sales a specific type of transaction. How they are applied varies with location, market conditions, intentions, type of property, etc. Remember that in business, when a experienced person mixes with a person with money, the experienced person ends up with money and the inexperienced person ends up with the experience.
Short Sales A-Z is exclusive about the technique of short sales. No dream selling, nothing else. Make sure exactly what you are getting when you buy a course.
Sincerely,
Oscar
At 12:01 AM 2/3/2009, you wrote:
Hello!
I have been searching the Internet to find the BEST short sale course available. Since I am new to this field, I need all the help I can get!
My concern is the follow-up costs to joining your program? Other programs want a $197 per month consultation/training fee in addition to the original sign-up investment.. They also want 1/2 of the monies earned through short sales. So my question obviously is — what additional costs are required to be paid when joining your training program? (And, are you really the Best?!?)
I thank you! Roberta Loy, Arizona — Would be "Investor" with lots to learn!
Posted November 24th, 2008
(Download Article)
This is critical information. If you are about to be engaged in a short sale transaction you MUST understand this important fact: Short sales are type of short payoff outcome.
The term short sale is loosely used to refer to any negotiation in which a secured creditor accepts as payment less than what is owed. The terms of this acceptance have distinctive debt relief, collection and tax implications. This brief article explains this critical subject.
Note: For precision, in this article professional level terminology is used.
- The property owner will be referred to as the debtor
- Banks will be referred to as creditors
- Secured creditor is a bank that has a mortgage on a property
- Releasing an interest in a property is removing the mortgage. This is needed to make a property marketable. Without this, the property is difficult to sell.
Short Payoffs
In real estate, a short payoff is an arrangement in which a secured creditor releases its interest in a property that is collateral for debt, by accepting less than full payment. Since the creditor is getting paid short of the full debt payoff, this phenomenon is called a short payoff.
There are two types of short payoffs: Short Sale & Release of Lien. Although they are similar, these two types of short payoff are extremely different.
Short Sale: In a short sale a creditor accepts less than full payoff for the debt, releases it interest in the property and forgives the debtor for any short fall. The property owner no longer owes anything to the creditor. Because of this, a short sale is debt relief. According to the IRS, debt relief is financial betterment. Therefore a short sale is a taxable event. Because of this, and to be able write off the loss, the creditor will issue the property owner an IRS 1099 C, Cancelation of Debt. Typically, if the property owner is insolvent, and with the use of a good CPA, there is no increase in tax burden to the property owner. The debtor should also look at the Mortgage Debt Relief Act
Release of Lien: In a release of lien, the creditor releases its interest on a property for less than owed, but does not forgive the unpaid debt caused by the short fall. The property owner still owes to the creditor. Typically the property owner and the creditor arrange for some sort of payment plan. A release of lien is not debt forgiveness, so there is no 1099. However, the property owner will no longer be able to apply debt payment interests as tax write-off.
Off course most property owners prefer a short sale over a release of lien; however that is not always possible. The type of short payoff available to the property owner depends mostly on the property owner’s financial situation, ability to pay, and how easy a collections target the debtor is.
By far, the most common type of short payoff is the release of lien. The term short sale is liberally use in reference to any type of short pay off. As such, the fact that someone mentions the term “short sale”, does not necessarily mean a true short sale. Through the years this has led to plenty of disappointment, disputes, personal financial disasters and a bad end to lots real estate careers.
When Short Sale? When Release of Lien?
Whether a property owner will get a short sale or a release of lien depends on the type of debt secured by the property and the chances of the creditor successfully collecting the debt.
When a Short Sale: Typically a creditor will allow the short sale of a property when it is impossible, or very difficult to collect any further funds from a debtor. This extreme example illustrates the situation. An older property owner, now living on social security income, in a rented apartment, and just discharged from bankruptcy Chapter 7 is impossible to collect on. In this case creditor will either approve a short sale or foreclose.
When a Release of Lien: Typically a creditor will insist on a release of lien if the debtor has present and/or future ability to pay, and is a good collections target. This extreme example clearly illustrates matters. A younger doctor going through a nasty divorce may presently be totally insolvent. However, as soon as the divorce situation is resolved, chances are that the doctor will be financially fit again. So he will have ability to pay. Not only that, for a collections company, such a professional is easy to locate and harass. It would be very easy for a collector to attempt garnishing wages. To make it worse, such actions can have huge negative effects in the doctor’s career (increase insurance premiums, stigma, etc). Therefore, most likely the young doctor will end up only with a release of lien, and most likely be almost happy to make payments.
Most releases of lien take place with cash-out second mortgages and home equity lines of credit (HELOC). In these cases, typically the creditor with the first mortgage forecloses, gets paid most of the debt at foreclosure sale or ends up owning the property. After the foreclosure, the junior creditors (second mortgage, HELOC, etc), are no longer secured by the property. However, the property owner still remains indebted to these creditors. These creditors will attempt to collect. Collection efforts will be aggressive if the size of the debt is large enough, and the chances of collecting of very good. So going back to the extreme example of the young doctor, such individual has no escape. He will be collected anyway. The question is how. With a release of lien, the young doctor will right away be in a payment plan he can handle. With a foreclosure, the young doctor will be chased by aggressive collectors. For a professional like him, with a lot to lose, this would be a terrible situation.
Hopefully this article clearly illustrates short payoffs. I used extreme examples because they are easier to visualize. Most individuals fall in a category somewhere between these two extremes. Just remember: A short payoff is when the creditor lets the debtor sell for less than what is owed. In the short sale the remaining debt is forgiven. In the release of lien it is not.
Copyright Reserved
Oscar Morante, Advanced Real Estate Concepts, LLC
Un-authorized reproduction prohibited
Posted October 23rd, 2008
- Transactions Are Perishable Items
- Opportunities Don’t Wait
- There Are Few Second Chances (Specially In Real Estate)
- We Fund Your Transactions NOW
Funding Program Description
We fund the acquisition side of double escrow transactions. Funding provided for 24 hours maximum, from one banking day to the next. No holding over any period of time. We provide escrow instructions specially designed for this type of closing.
Background:
A true double escrow transaction has two components: Acquisition and Re-Sale. Proper disclosures are required.
- Acquisition: Investor buys the property (with re-sale funds)
- Re-Sale: The investor sells the property to the end user (for more than the acquisition cost)
As of the beginning of 2008, title companies have become increasingly less comfortable with flips. There is nothing wrong with double escrows. However, increased risks, additional lender escrow instructions and other factors, are making this type of closings more challenging. Funding double escrow transactions using re-sale profits still happens, but it is less easy. Our double escrow alternative funding is designed to help you overcome these issues and keep making money. We can fund up to 3′000,000, so basically everything is within your range.
Funding Program Outline
Our double escrow alternative funding is designed for you to succeed. All you need to do is be knowledgeable and bring a ready to close transaction. All costs are payable at closing. This is ZERO DOWN investment at its best.
Funding Approval Response Time:
- Usually within 24 hours
- See Transaction Submission (below)
Cost Structure:
- Typical Funding Fee: 3 Points
- Typical Escrow Fee: $500
- Minimum Fee: $3000
- Other Costs: NOT Common – Up-front estimate provided
- Cost Payment: All due closing and payable from transaction profits proceeds
Requirements:
- READY TO CLOSE transaction
- Evident Profit Spread
- Sufficient time (see time frames)
- Be knowledgeable
Time Frames:
- Typical Time Frame: 72 hours
- Ideal Time Frame: Submit Monday. Close Friday.
- Better Yet: Have more time and plenty of fall back dates
Transaction Submission
Provide all the acquisition, re-sale and supporting documents.
Acquisition Documents:
- Purchase and sell agreement
- Preliminary settlement statements (HUD1 for residential short sales)
- Settlement letters (short sale approval)
- Payoff statements
- Any releases
Re-Sale Documents:
- Purchase and sell agreement
- Preliminary settlement statements (HUD1 for residential)
- End buyer proof of funding. Better if it is a clear-to-close approval.
Submit Transactions To:
Oscar Morante, Advanced Real Estate Concepts, LLC
- Email: oscar@bestshortsales.com
- Fax: 503-296-5663
- Ph: 971-222-3734
Funding Pre-Approvals
Send request for funding pre-approval letter via email to Oscar Morante at oscar@bestshortsales.com
Information Needed:
- Investor name
- Company Name
- Address
- Email
- Fax
- Short transaction explanation paragraph (so I can better help you)
- Subject property address
- Request “Blanket Letter” if you make multiple offers or do not yet have a defined target property
www.1-DayMoney.com
Posted October 22nd, 2008
I am glad you are still interested in Short Sales. Hopefully you enjoyed yesterday’s free lesson. Today I want to share with you something very important: The real estate business is not really about buildings. It is about people. Without people land is worthless and structures meaningless.
It is people that own and pay for houses and buildings. People finance real estate and borrow against too. Real estate is inert. Buildings, houses and land don’t make decisions. The people that own them do. As such, default and foreclosure problems are caused by people.
The best place to start working on a short sale is by understanding the default causes and nature of the homeowner. The FREE video lesson below will give a good insight into foreclosure causes and help you understand yours.
Foreclosure Causes Lesson
If you benefited and enjoyed this free lesson, and need master Short Sales, take Short Sales A-Z Online Video Course. This will be one of the best real estate investments you will ever make.
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Click HERE for a $250 Single Payment
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Posted October 21st, 2008
Short Sales are an interesting phenomenon. In a Short Sale, a property is discounted such that, with lender’s approval, an owner sells a property for less than what is owed. This is hard to believe. However, these days, this phenomenon is commonplace. This is how I got hooked on short sales.
Lesson #1:
To me it still feels like yesterday. Time flies. This happened in 2004. After studying as much as possible about short sales, I decided to go out into the market, search for properties and actually do flips. After a couple of months, I learned my first lesson: Only work with motivated clients, who I can help and who appreciate my efforts.
Lesson #2:
So I got my chance. This is how it happened. I was driving through a neighborhood which I was considering for my marketing efforts. As I was driving by, I noted several properties which I though would be worthwhile making offers on. I even jotted down some addresses. That same afternoon, a Friday, I got my weekly NOD list. To my surprise, one of the properties on my list was in default. I located the homeowner’s number. To my even bigger surprise, the owners were friendly to me, and better yet, open to my proposal. They had just being discharged for bankruptcy chapter seven. Mistakenly thinking they no longer owned the property, they had moved out. They made it clear that they wanted to save as much of their credit as possible. They wanted to avoid foreclosure. Here I learned my second lesson: Clients need to be open to being helped.
Lesson #3:
I made an offer for $160K. That meant that the first mortgage would get paid in full and the second only would get $1000. The second mortgage holder made a BPO and the property came out at $200K. This was almost $100K less than a similar property a block away that had just been restored. As such, there was around $30K of equity. Not bad, but not good enough for a flip. So I asked the bank rep the following: If I buy the property now, without an agent, would they discount the cost of an agent’s commission and closing costs at a total of 7%? They said yes. That gave me an additional $14K to play with. That same afternoon I placed a sign at the property for $224K. The next morning, a Sunday, I had a cash offer for $220K.
Monday morning I met the end buyer. He was fresh out of college, but was well coached by his sister, a mortgage broker, and his dad, a real estate attorney. I could have been greedy and asked for more. But here’s the third lesson: Greed kills deals. Cash closes deals!
Lesson #4:
It felt like an eternity, but it only took two weeks to get the settlement letters. I closed the transaction in a double escrow. Without any cash down, I made around $24K! Not only that: The end buyer got a great deal. The homeowner avoided foreclosure and bought another property a year later! This taught me my fourth lesson: Happy clients give great testimonials!
Short Sales have been good to me. Sure they are a bit of work. But what isn’t? Today, as an agent, investor and trainer, I entirely make my living out of short sales. Presently, and for the next several years, short sales will be over 40% of the residential real estate sales. That is a huge percentage. Basically, the short sale flood has no end in sight. Go with the flow: learn how to do short sales!
My Proposal
I would like the opportunity and privilege to be your short sale trainer. Get Short Sales A-Z. This will be one of the best real estate investments you will ever make. Whether you are an agent or investor, you will learn all the ropes of the business. All this can be done in one afternoon. So in a few hours, you will be good to go. After that, all you need to do is start taking action. Deals are abundant, so there is no lack of business.
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Posted October 16th, 2008
Hi! This is Oscar. I am glad you subscribed to BestShortSales.com yesterday. Thanks for considering me and Short Sales A-Z for your short sales training. We have lots of events and activities that will be of interesting to you. For the next few weeks I will be sharing with you a few important things about Short Sales.
Whether you are an agent or investor, you are absolutely doing the right thing by looking into short sales. For the foreseeable future, this is the segment of the real estate market that will be growing the most. In fact, these days, it is almost inevitable to not run into them. If you want to thrive in short sales, BestShortSales.com is the site to visit, and Short Sales A-Z is the by far the Best Short Sales Course there is.
%$name$%, I am both an investor and a real estate broker. I believe that in real estate the more you learn, the more you earn. As you, I invest heavily in my real estate education and strive to be as well rounded as possible. The reason is simple: Education Pays. I am extremely active in Short Sales. I created Short Sales A-Z because to be good at something two things are necessary: Practicing in the real world, and teaching to others.
I am 100% confident that you will be very happy with my Short Sales A-Z Video course. Short Sales A-Z will teach you all the needed skills to start closing transaction right away. Short Sales A-Z is both in-depth and easy to understand. I believe that education needs to be fun, not painful. With this in mind, I created a course both enjoyable and immediately applicable. Short Sales A-Z is delivered to you in highly graphical video format, with a downloadable work book in case you like printed material. You will not need to go through endless boring binders. In five hours, which you can complete at your own leisure and pace, you will become a short sale expert. Not only that. The course will be in your computer and you can review any segment any time.
Order Short Sales A-Z Online Now
If you are into Short Sales this is it! This course will pay for itself over and over. You will have no regrets. Short Sales A-Z is extremely well priced and includes all future updates. This is the best deal you will ever find in a Short Sales course.
Here Are Some Student Quotes:
This is the best course I have found on short sales. It was easy to understand and easy to follow. It covers the entire process from start to finish, truly excellent. I say all of this as a Real Estate Broker I have purchase other material in the past and nothing compares.
Luis Pezzini
www.SunsetStripRealty.com
Los Angeles, California
Short Sales A-Z is a great course. I definitely got a lot of bang for the buck. I say this as an already very experienced investor. I own apartment buildings, a development company and a short sale company. We re-sell, sell on contract and retail several properties a month. Our investments are in the mid-Willamette Valley and the Oregon Coast. Short Sales A-Z greatly helped me tune up on short sales and better take advantage of this field. I am very happy with the course.
Shawn Phillips
Innovative Investments
Investor, Corvallis, Oregon
“We bought Short Sales A-Z on Friday and were up to date and running on the subject by Monday. We are seasoned agents and have taken lots of courses. This course is in-depth and at the same time easy to understand. This course is not about dream selling, it is about knowing the subject and making it in Short Sales.”
Kirk & Doreen
Crystal Real Estate Services
Agents, San Jose, CA
More Testimonials
Posted October 16th, 2008
Hi, this is Oscar.
I am glad you are searching for Short Sale training, tools and information. As you know Short Sales is where most of the real estate business presently is. I am extremely active in Short Sales both as an investor and as an agent. Not only that. I truly enjoy sharing my knowledge and creating tools to make Short Selling more efficient. If you are serious about Short Sales you should take my courses, obtain my downloadable tools and participate in my web meetings.
This is Why You Should Get Short Sales A-Z Online:
- You will greatly increase your real estate commission and flip income.
- Short Sales is were the RE business is presently at, and will be, in foreseeable future.
- There is an endless demand for this skill.
- The clients are easy to identify.
- There are more clients than competitors.
- Even in the best economic times there is a demand for Short Sales.
You will find Short Sales A-Z Online, my online class extremely competitive.
- I offer the most bang for the buck. Make your own comparisons.
- You will get all the knowledge needed to close transactions now.
- Not only that. Short Sales A-Z Online is presented in a highly graphical style that will allow you to internalize the info quickly.
- In addition, you have the benefit of reviewing the material as often as possible, with minimal effort.
- The most common feedback I get about Short Sales A-Z online has to do with how detailed and in depth, yet entertaining it is. Entertainment was not my original objective, but it is a certainly a great by-product.
- Short Sales A-Z provides all the transactional knowledge required to consummate transactions with the benefit of definitely not been boring.
- Short Sales A-Z Online makes learning short sales fun.
- This course will pay for itself over and over.
On top of all Short Sales A-Z is extremely well priced. At $250 you can’t go wrong. We even have a payment plan.
Make a good decision: Become a Short Sales Expert within hours!
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