Replies to This Discussion

Permalink Reply by Stephanie Sabo on June 12, 2011 at 5:06am

Hi Rajesh. Since the property is in CA, if it is a purchase money loan and you have not refinanced the property, you might be forgiven the entire deficiency by law. You should check with an attorney. Also, if it's HAFA eligible, or BofA Cooperative Short Sale for example, the may be forgiven in the final short sale approval letter.  If you are in the SF Bay Area, contact me at [email protected] and I may be able to help you.  If not, I would be happy to refer you to someone who can, give you more detailed info, and/or refer you to a good local attorney. 

 

Stephanie - Certified HAFA Specialist

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Permalink Reply by ElizabethWeintraub00697006LyonRE on June 12, 2011 at 10:55am

Good idea with the newsletter, BB.

 

Well, let's see, Rajesh, you can't do a HAFA, because it's no longer your residence. SB 931 has added Section 580e to the Civil Code; however, the lawyers I hang with say don't rely on it. It hasn't been tested -- no appellate cases yet. It went flying through the legislature with no objection from banks. Would you rather be certain or would you rather take a chance? Your most likely best bet is to get that release of liability from the bank itself.

 

In addition to legal advice, you should get tax advice. Although you might be subject to taxes because it is a rental, you might able to qualify as insolvent if your liabilities exceed your assets and your accountant agrees with this premise. I can't give you legal and tax advice because I am not a lawyer nor a CPA, even though I may play one in my own mind. I am, on the other hand, a Sacramento short sale agent and Certified HAFA Specialist. But I work only in the four county area of Sacramento.

 

Elizabeth Weintraub

Broker-Associate #00697006

Lyon Real Estate

Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

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Permalink Reply by Tammy Davis on June 12, 2011 at 11:44am

Rajesh,

Like Brian, I also short sold one of my rental properties and was able to negotiate it with no cash required a close.

It's all part of the negotiation with the lender...the last non-owner occupied that I closed...I actually negotiated the seller's receiving money at close of escrow. Actually an addendum that I prepare as part of all of my contracts states that the terms and conditions of the short sale must be acceptable to the seller..meaning, if the lender comes back and wants money or note you could cancel the transaction/contract.

I'm in California..if I can help, feel free to email me anytime.

 

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Permalink Reply by Rajesh H on June 13, 2011 at 8:23am

Thanks Stephanie! I'll be meeting a local RE attorney tommorrow. I'll update on what I hear from him.

 

Thanks

Rajesh

Stephanie Sabo said:

Hi Rajesh. Since the property is in CA, if it is a purchase money loan and you have not refinanced the property, you might be forgiven the entire deficiency by law. You should check with an attorney. Also, if it's HAFA eligible, or BofA Cooperative Short Sale for example, the may be forgiven in the final short sale approval letter.  If you are in the SF Bay Area, contact me at [email protected] and I may be able to help you.  If not, I would be happy to refer you to someone who can, give you more detailed info, and/or refer you to a good local attorney. 

 

Stephanie - Certified HAFA Specialist

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Permalink Reply by Rajesh H on June 14, 2011 at 6:01pm

I met with local Real Estate attorney today to clarify my questions. Apparantly, he is real estate broker as well specializing in short sale. He charges $2500 for the whole process of short sale. His value proposition for the fee is that he would make sure that the short sale/foreclosure won't affect me a lot, and he would word the contract to seek a sale that is favorable to me.

Has anyone heard of this type of deals?

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Permalink Reply by Tammy Davis on June 14, 2011 at 6:19pm

Hi Rajesh,

I have heard of this and if he is reputable and has closed short sales...it might be good. But please check him out....you can visit the DRE website and check his license number, google his name...really take the time to investigate. Depending on the area you are in...if you are in my area I can check the MLS to really see how many deals he has successfully listed and closed. Never agree to pay any fee in advance, and if he can handle the short sale...can he handle the sale? Meaning does he belong to the local MLS, does he market the property on the internet...what does he do to sell the property?

Just be really, really through....I just had some good friends taken advantage of someone claiming to be an attorney and they lost several thousand dollars for a fee paid upfront.

If I can help...my advice and guidance is always for free ~~

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Permalink Reply by Stephen Shafer on June 15, 2011 at 3:28am

Rajesh,

Under the new MARS rules he may not charge you an up front fee. I have closed similiar deals in Northern & Southern California and do NOT charge an up front fee as it  is forbidden by the DRE. Get a 2nd opinion!

Stephen Shafer

Rajesh H said:

I met with local Real Estate attorney today to clarify my questions. Apparantly, he is real estate broker as well specializing in short sale. He charges $2500 for the whole process of short sale. His value proposition for the fee is that he would make sure that the short sale/foreclosure won't affect me a lot, and he would word the contract to seek a sale that is favorable to me.

Has anyone heard of this type of deals?

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Permalink Reply by Jeff Payne on June 15, 2011 at 3:47am

Rajesh,

There is some good advice here, might I suggest checking to see if a member here can help you out? 

On a side note, how much is the deficiency or short fall on the sale?  I know it goes against the teachings on this site but if you have the means to pay it, why don't you sell it and instead of needing lender approval, come up with the cash to pay the difference?  I guess alot of it depends on the loss. 

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Permalink Reply by Stephanie Sabo on June 15, 2011 at 5:49am

Rajesh, please call me to discuss in detail.  I believe an attorney can charge the up-front fee but a broker cannot; have to verify. In either case, you should not pay an upfront fee to ANYBODY. You do not need to pay a short sale fee at all. The real estate commission gets paid out of the sale proceeds (so out of the money the lender nets).  So there is no reason for you to come out of pocket. 

You can do a short sale in CA on rental property and may be able to get the deficiency forgiven.  It depends on the situation and who the investor is that owns your Promissory Note. I did one last year under the same circumstances - bought in 2005, lived in it for 2-3 years, then rental since. They were forgiven for any deficiency in the short sale documents. So it can be done on a rental depending on your personal circumstances.

I work on these a lot and have an attorney who assists when necessary. He usually doesn't charge me if it's a quick phone call here or there.  If he needs to be paid for an hour to make some calls, it's certainly a lot better than paying the so-called short sale broker who is actually an attorney (who seems to be taking advantage of consumers)!  Stephanie -Equis Realty - 800.590.1544

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Permalink Reply by Rajesh H on June 15, 2011 at 6:04am

Hi Jeff,

In my case the deficiency would be about 125 -150K. I am okay to pay upto 5-10K if the need arises to get out of this debt.

 

Rajesh

Jeff Payne said:

Rajesh,

There is some good advice here, might I suggest checking to see if a member here can help you out? 

On a side note, how much is the deficiency or short fall on the sale?  I know it goes against the teachings on this site but if you have the means to pay it, why don't you sell it and instead of needing lender approval, come up with the cash to pay the difference?  I guess alot of it depends on the loss. 

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Permalink Reply by Rajesh H on June 15, 2011 at 6:11am

Thanks Tammy for the advice. As a end user, can I look at the MLS website in my local area to find out the sales that a broker has done or can this be done only by a person who has permission to do in the MLS?

Tammy Davis said:

Hi Rajesh,

I have heard of this and if he is reputable and has closed short sales...it might be good. But please check him out....you can visit the DRE website and check his license number, google his name...really take the time to investigate. Depending on the area you are in...if you are in my area I can check the MLS to really see how many deals he has successfully listed and closed. Never agree to pay any fee in advance, and if he can handle the short sale...can he handle the sale? Meaning does he belong to the local MLS, does he market the property on the internet...what does he do to sell the property?

Just be really, really through....I just had some good friends taken advantage of someone claiming to be an attorney and they lost several thousand dollars for a fee paid upfront.

If I can help...my advice and guidance is always for free ~~

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Permalink Reply by Tammy Davis on June 15, 2011 at 6:15am

Unfortunately you can't Rajesh....all you can do is check the license status on the DRE website.

If you want to email me the information....I would be happy to check it out for you. I happen to be working on the MLS as we speak.

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