Replies to This Discussion

Permalink Reply by Lydia on June 27, 2012 at 9:24am

Hi Vijay,

I sent you a PM so check your email here but I did want to answer your questions as best a I can.  For the past 5 years I have worked exclusively with short sale in Marin, Alameda and Contra Costa and have done a lot os short sales with Citi.

1) How intense the SS process is going to be?

Intensity all depends on your Realtor's experience.  The more experienced your Realtor is with short sale the easier the process.  It all comes down to how aggressive you are with moving your file forward and keeping in constant communication with all parties involved (Buyer, seller, agents etc)  the difficulty at times with short sales is that buyers do back out but typically if the property is priced right you will have multiple offers and be able to put a 2nd buyer into back up position.

2) And, if Citi would agree to SS or would they the rent would cover loan so stick with it?

Personally if you can no longer afford to be negative cash flow an Citi is not offering a loan modification or is not willing to adjust the value of the property your best option is to do a short sale. Citi in my experience has been relatively easy to work with and all of my short sales have received approval.

3) If Citi agrees to SS, how they would handle the debt cancellation?

If Citi agrees to a short sale per CA Senate Bills 931 and 458 your debt is forgiven. However, I suggest that you touch base with your tax advisor to see what your tax implications are.

4) Would Citi come after me for remaining debt or forgive the balance?

No. In California you have Senate Bills 931 and 458 that stipulate that if the lenders agree to a short sale approval the debt is forgiven.  This is also written in their approval letters.

5) If Citi cancel the debt, what are the implications and how Citi report SS (debt cancellation) to Credit Bureaus?

Typically the lender will state "account paid as agreed" or "paid in full for less than the full balance"

6) If Citi is going to give me 1099-C, what are my tax consequences because it is not my principal residency per the law that about to expire this year?

Unfortunately, we cannot answer this type of question a it is out of our area of expertise.  Your best bet would be to contact your CPA or EA and ask them this question.  If you need a list of CPAs in the Bay Area please feel free to shoot me an email and I will forward you a list.

Vijay,  I hope that answers your questions. While each property is unique each outcome will vary but again, you need to find a Realtor that specializes in short sales and that has a solid track record of closing short sales.

If you need any additional info feel free to email me

Lydia Puller

www.LydiaPuller.com

http://www.shortsalesmarincounty.com

Permalink Reply by Chanakya on June 27, 2012 at 9:38am

Hi Lydia,

Thanks a lot for a detailed and prompt response.

I understand this forum and realtors cannot answer tax questions. However, I would like to hear from borrowers or experience of your customers on how they had to handle the tax implications of receiving 1099-C with 200K as CoD.

It would be a nightmare for me if I have to pay tax on that. And when it comes to taxes, we all know there is no negotiations with IRS. However, we could negotiate with the lender and that's where a strong knowledgeable  realtor/broker help is needed to get the best of the situation. I may be naive or totally wrong in my expectations.

That's exactly reason I am asking experienced & knowledgeable professionals like you. This is a public forum and I don't intend to hold anyone responsible for sharing their knowledge and experience of their own or their customers.

So I request again to share whatever you could.

Permalink Reply by Michael Hayley on June 27, 2012 at 9:31am

1. its painful; its work but most of the time it is successful. I'll say CitiMortgage is one of the better, more professional lenders in the country (in my experience)

2. there is no way to know. What is the difference between the est. sales price and the loan amount? its based on the math of the transaction and on how well your negotiator sells it. 

3. its handled through the escrow agent

4. One or the other (not to be flippant). It depends on your financial status and hardship, and on the skill of the person handling your short sale, the math of the transaction, and on the investor who owns the note. 

5. "paid, less than amount owed". 

6.call your CPA and pay for a pro-forma calculation; its a complex calculation based on your basis, expenses, loss.

Suggestion: hire an expert to help you with this. Don't go alone. Best wishes. 

 

Permalink Reply by Chanakya on June 27, 2012 at 7:04pm

Thanks a lot Michael for sharing your knowledge without any regard to if I am or would ever be your client. I am surprised to see the amount of feedback I received for my humble request on this forum/site.

I am surprised to see this site is filled with agents only seeking for clients. But I guess people don't realize that sharing one's knowledge really substantiate how good he or she is and others (customers) follow him/her to seek help and/or for to get their business done. 

I thought this site and forum was blessing in my hard time but I guess I am wrong or I may be asking for quick gratification after bleeding for 7 years with my rental property.