Short Sale

Question: How does a home Foreclosure process work?

If someone with an A paper loan goes into Foreclosure because their home is worth less than half the value of the mortgage therefore bank does not approve Short Sale, and they lost their job, how does the home Foreclosure process work? This would be for CA. And how long does such home Foreclosure stay on the credit report and would existing credit card rates go up?

Answer: At this point it doesn't. Most lenders have suspended Foreclosures and Short-Sales. The rest will follow. That is to give the President time to hammer out details of The Foreclosure Rescue Act. Its all over the news.

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Question: Where can we find help for foreclosures issues? And what is Obama doing to help Foreclosure victims?

My parents recently lost their home to Foreclosure and now they are planning to file for bankruptcy. They recently went to file their taxes and they found out that the IRS is billing them $52,000 for abandonment even though they have tried for months asking for help from the banks. Need some advise on how I can help guide my parents to the right people to settle the foreclosures.

Answer: What people do not understand is that if/when a property is foreclosed on, the borrower does not simply walk away with a Foreclosure on their credit. At the beginning of the following year they get a 1099 and have to claim the banks loss as an income and then pay taxes on it. The IRS billing them is understandable, especially if they had unpaid taxes and the IRS placed a 2nd lien against the property.

The other thing that people forget is that the borrower may ask banks for help, but they have to qualify for it. Investors are not 'handing' the bank to people because they need help - they have to qualify by showing they can afford a lower payment/interest rate. If they do not qualify this way, or if there are 2nd liens on the property - often the banks hands are tied because the collateral can be foreclosed on by the other lien holder(s) and the risk of loss all the way around is to great.

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Question: Short Sale Help - do you have to be financially destitute to get a Short Sale approved?

Need Short Sale help /advice. I can't make the payments on a second home and it's not worth what I paid. I have equity in my primary home and I make a good salary, but have lots of other debts. Is a Short Sale possible or do I need to be totally out of equity and money? I must add that my outgo is much more than my income at this point. Even though I have equity and a good salary, I feel broke.

Answer: The mortgage company could permit a Short Sale (but they probably wont) Have you tried renting the property? getting a second job? renting a room in your own home? cutting back on cable and non necessities? To find out for sure if your mortgage companies will approve a Short Sale of your home, you should get help from a Realtor. Nowadays, there are plenty of Realtors who have done a lot of Short Sale transactions so they will be able to help or give you advice of what to do. They might even have experience dealing with your mortgage companies already so they will be in good position to give you more information of whether they will approve a Short Sale proposal.

You can find & compare Realtors below so you know you are getting the right Realtor for you and your situation.