I have a potential short sale coming up and I'm hoping to get a better understanding of what the potential repercussions might be for the seller. The home was originally purchased as the owners residence but he has long since moved out of state and now lives in Arizona. The property has been rented since he moved but he has never purchased a home in Arizona so this is his only residence. My questions are regarding both tax liabilities and deficiencies. Is there tax liability issues from both federal and state if this is not owner occupied and is there any difference or benefit to a short sale v foreclosure? Second is whether he is liable for any deficiences since he is not a California resident? One other strange aspect to this is that there is a second person on title, who is a California resident, but she is not on title.
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Yes. Yes to Harry. First, as far as tax liabilities, you need to direct them to a CPA, but as far as I know so long as they have resided in the home in the last 12 months, they will be covered. No on can answer on deficiencies. The lender MAY try to pursue a deficiency, but in CA laws are different. Lenders can't pursue deficiencies unless fraud is present.
Please explain "there is a second person on title, who is a California resident, but she is not on title. " Either they are on title or not. I don't think it has anything to do with who is on title but WHERE the property is located. Harry is right on.