foreclosure (130)

Selling homes as-is is becoming more and more widespread through the U.S., in large part because of the many benefits it has for homeowners beyond just stopping foreclosures. In San Diego, we have seen many homeowners finally find peace of mind once they decided to sell their home as-is. However, many homeowners were concerned that selling a house under the “as-is” name can negatively impact the resale value, and shrink the pool of potential buyers.

These are all very legitimate concerns, but the truth is that when done well, selling your home as-is does not impact either the resale value or the potential buyers available. When purchasing homes, some of the most important factors that people look for are location, configuration of the home, and price. None of these factors are negatively impacted by as-is sales, and are often predetermined by the house itself.

Of course this is not to say that a house has never been negatively impacted by an as-is sale. As with all home sales, it is important to make sure that the sale is handled professionally and courteously in order to guarantee a smooth transition. We found that as long as the price is fair, and everyone is honest about the home’s condition and history, there is no problem with selling the house. Most home buyers are educated enough to understand that they can still do inspections, and know that “as-is” is no longer a term associated with money trap homes, which is something that it was once associated with.

Selling homes as-is has come a long way, but of course can vary from city to city and state to state. If you would like more detailed information about selling your home as-is in your area, give us a call today.

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Ignoring Potentially 21%

Ignoring Potentially 21%

In April, 2014, RealtyTrac came out with a report that showed that 1) 9.1 million, or 17% of all US mortgages (total number of US mortgages calculated at over 53.5 million) were STILL seriously underwater, where the loan amount is higher than the property value. Housing values in many areas are coming back, but not enough to put many of the 9.1 million still underwater homeowners into a positive equity position.

In March of 2013, 2) RealtyTrac reported there were 2.2 million past short sellers trying to re-enter the housing market again.

Past short sellers and still underwater homeowners who may have to short sell in the future equate to potentially 21% of the total US residential mortgage market numbers.

The credit of a great majority of those that "have had to or may have to short sell" is proven to be good, with most professing and pr...oving that keeping credit intact is given the highest priority. However, most underwater homeowners have dangerously high back end debt to income ratios as they borrow against everything they've got to stay put, until they cannot any longer. Many are depleting retirement funds and borrowing from other assets to stay solvent.

And the "strategic default" label placed en-masse upon short sellers from 2007-2009 has been proven to be 3) "relatively rare" suggesting that the greatest indicator of default has been unemployment, and that policies designed to promote employment, such as payroll tax cuts, are most likely to stem defaults rather than policies that temporarily modify mortgages.

Short sales are not approved unless a hardship exists, and the majority of those affected will not tell realtors or even their lender of hardship endured unless seriously prodded or required to do so.

Short sellers are saddled with an even bigger problem once they are able to exit their home. There is a credit code problem where past short sale credit shows up as a foreclosure. The foreclosure code is borrowed from the Metro 2 system and the code conflicts in the same raw data, where a narrative of "settled for less than full balance" appears with foreclosure credit code. This credit change occurs when a mortgage holder applies for a short sale and when their mortgage credit goes past 4)120 days delinquent.

On Nov. 16, 2013, the Fannie Mae DU version 9.1 became available and was supposed to allow lenders who were receiving a Refer/Caution( denial) on 5) conventional mortgages because the past short sale was showing as a foreclosure, to go into the Fannie Mae system and make a change. Instead, lenders must be given the OK to make the change first by Fannie Mae in verbiage provided in findings. This only works occasionally, and when the lender receives the OK to go in and make the change, the lender must state "YES" to a foreclosure to finalize.

Further, the problem also exists in Freddie Mac, which was unknown prior because Freddie Mac does not give an automated approval on past short sales until four years past the short sale. We now have cases of Freddie Mac denials of short sales, past the four years, miscoded as a foreclosure.

When we start paying attention to the erroneous foreclosure code that is stopping past short sellers from re-entering the housing market and threatens those who may have to short sell with the same, and address that the "fixes" have problems that need to be corrected, then it may be possible to see a shift in the housing market. 

2) Boomerang buyers return to market after foreclosure/By Les Christie @CNNMoney March 11, 2013
4) The delinquency requirement for a short sale has historically been required by lenders for short sale approval. Recently, lender have NOT been requiring delinquency, or a shortened period such as 31 days, required on an FHA short sale.
5) This was never a problem with FHA and VA mortgages. The Total Scorecard, a secondary automated system, parallels the Fannie Mae Desktop Underwriter/Originator and the Freddie Mac Loan Prospector. FHA and VA mortgages with a past short sale typically receive an approval but with verbiage that discloses there may be a past pre-foreclosure or foreclosure with direction to confirm and adjust per FHA/VA guidelines.

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Millions of Homeowners Underwater

First-time homebuyers are searching for affordable homes; however those homes are a rare find on the market because of the negative equity on most of those homes. According to the first quarter of Zillow® Negative Equity Report, almost 9.7 million homeowners are underwater.

Homeowners who owe more on their mortgage than the house is worth are in a sticky situation. This is usually because they have fallen behind on their payments and are not able to afford that house anymore. Homeowners in a negative equity situation are not able to bring money to closing or pay for the deficiency, so they are not able to list their home for sell on the market.

In order to successfully sell their home, the homeowner would have to do a short sale so that the lender would accept a short payoff of what is owed. With the right short sale specialist, this would help the homeowners move on and avoid an additional financial problem.

The misleading information and absence of the resources about short sales are contributing to the inventory shortage. This leads to the homes that are on the market to be priced higher, making homes even less affordable for first-time homebuyers.

Speak to one of our short sale experts in Texas by calling (972)342-0011. 

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A Guide To Home Mortgage Rates


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I just wanted to drop you a note to express my heartfelt thanks for being there when someone needs you. All too often, the pursuit of wealth and duplicity associated with gaining the inside track to the "All-Mighty Dollar" seems to win over and corrupt even the most honest & upright individuals among us. Thankfully, you are not among them! 

We have known each other for a short 2-3 years but it seems as though we've known each other forever. We are kindred spirits, you & I. We believe in fighting for the oppressed, the put upon, the lied to...the "Little Guy" who for one reason or another cannot or doesn't know how to fight back against the Corporate Giant banking industry in regards to protecting their homes from, oftimes, illegal "landgrab" foreclosures. It was through our dedication to fight for them that we have not only become business acquaintances but good friends.

Friendship in both personal as well as professional relationships requires a commitment to truth, honesty, respect and a dedication to others as well as oneself. You have outdone and outlasted many of the so-called "professionals" I have known in both my personal and professional lives. I can't count the times that I've called you with a question that I had that we didn't go into a long discussion & "learning exercise" that has expanded my expertise & ability to help homeowners to fight back against unscrupulous and underhanded banks. You've always been available, open and honest in your counsel, yet compassionate and understanding to the plight of the homeowner. For these qualities in you, I'm truly thankful.

In closing, let anyone who may question your ethics, who may doubt your honesty or think otherwise of your dedication contact me, personally. For all that you've done for me & everyone whose lives you've touched you are owed a huge debt of gratitude. If there is EVER anything that I may do to help you or your cause, PLEASE don' hesitate to call me!!

Randy Dant

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I would highly recommend the MIRS Service to family and friends. In fact - I have already done so. Janet was not only competent, extremely knowledgeable and factual, but she has always followed up on commitments she made to me. After the COTA was complete, she was also able to refer me to an attorney, Dale Wiley who was successful in stopping the foreclosure process on my home. The whole process was a pleasant one. The end result was what I had expected, no surprises- which was such a relief in such a stressful time. Thank you for providing such a valuable service to the average homeowners who would otherwise not have a clue about how to stop their foreclosure!

Gordon and Jeannie Merritt, WA

Make a difference! Save your home with this FREE report now!
Click here for more info!

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PDF Version of this article - 10 Underwater Homeowner Options

Slipping toward foreclosure can lead to feelings of anxiety, depression, and loss of self-esteem. Don’t give up. There are options available to help millions of homeowners rescue themselves from the brink. Since it is crucial to act before a foreclosure takes place, now is the most important time for you to review the following options and solutions.

As a Certified Distressed Property Expert (CDPE), I am trained in assessing all foreclosure alternatives and pursuing the best solution for your own financial situation.

1) Short Sale


A short sale allows the homeowner to avoid foreclosure, minimize financial damage and move on from a burdensome, unaffordable mortgage. In many cases, a short sale allows the borrower to qualify for a new mortgage in just 24 months, as opposed to five years or more after a foreclosure.

A trained real estate agent can help facilitate a short sale with your lender if you have three qualifications. First, you must show some type of financial or personal hardship. Second, you must have a monthly shortfall, meaning your monthly expenses are greater than your monthly income. Finally, you need to prove that your debts are greater than the value of your assets (certain investments, property, etc.). These requirements may differ per lender, so check with a distressed property specialist for specific information from your mortgage company.

2) Reinstatement

A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult for homeowners to achieve. The homeowner simply pays the total amount past due (including late fees) to the lender. This solution does not require the lender’s approval and will “reinstate” a mortgage up to the day before the foreclosure sale.

3) Forbearance or Repayment Plan

A forbearance or repayment plan involves negotiating with the mortgage company to allow the homeowner to repay back-payments over a period of time. The homeowner typically makes current mortgage payments in addition to a portion of the back-payments owed. This option requires lender approval.

4) Mortgage Modification

A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These changes require lender approval and typically result in a lower payment for the homeowner and a more affordable mortgage.

5) Rent the Property

This option does not require lender approval, but does require the homeowner’s ability to rent the house for enough money to cover the monthly mortgage payment.

It is important to remember that there may be unexpected costs associated with the maintenance of a rental property in addition to the monthly mortgage payments. Homeowners should take this into consideration when deciding whether this option will work for them.

6) Deed-in-Lieu of Foreclosure

Also known as a “friendly foreclosure,” a deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property. Deed-in-lieu can potentially lessen the damage to a credit score and future loan eligibility, and sometimes the lender will forgo their right to pursue a deficiency judgment, meaning the homeowner will not be responsible for further payments.

7) Bankruptcy

Many have considered and marketed bankruptcy as a “foreclosure solution,” but this is only true in some states and situations. This does not require lender approval, but you must have non-mortgage debts that you claim as a hardship.

Entering bankruptcy can be a risky and costly process. Be sure to seek the advice of a qualified bankruptcy attorney when pursuing this as an option.

8) Refinance

As opposed to mortgage modification, refinancing means you will be acquiring a new loan based on your current credit standing. If you have already missed mortgage payments, your credit score may make it difficult to find a loan with cheaper payments.

9) Sell the Property

Homeowners with sufficient equity can list their property with a qualified agent who understands the foreclosure process in their area. Unfortunately, many homeowners in today’s market have experienced a decline in home value and may owe more than what the home is worth.

10) Servicemembers Civil Relief Act

(Military personnel only)

If a member of the military is experiencing financial distress due to deployment—and that person can show that the debt was entered into prior to deployment—he or she may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers to help qualify them for this relief.

Pull Yourself Back From the Brink

If you are on the edge, you have no time to waste. Call me today; I’m here to lend a hand.

CDPEReflectionLogo-300x300.jpg?width=300Place Your Confidence in CDPE

With the right assistance, the stress of facing foreclosure becomes manageable. CDPE- designated agents have received the knowledge and training necessary to assess all possible foreclosure alternatives and pursue homeowners’ best options. A CDPE- designated agent attends several days of intensive, thorough training on foreclosure avoidance and how to help facilitate a short sale efficiently and ethically. The highly regarded CDPE logo means you are working with the most informed, up-to- date resource available.

Michael Collins, CDPE, SFR, BPOR
Broker - Rock Realty

If you are wondering if a short sale might be right for your home, please visit our Short Sale Home Evaluation page.

Is a Short Sale right for my Wisconsin Home?

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Short sale lease back programs have been around for quite some time now. In an SSLB program, the homeowner short sells their home and subsequently rents from the new owner upon closing the sale. Most of these type of programs have been fraudulent by nature but now HAFA allows a leaseback program if the homeowner qualifies.

Is it a good idea to lease back to homeowners who were not able to pay the mortgage payments in the first place? At the same time, isn’t it much easier to rent your own home until you repurchase another home? Let’s review once and for all, the Short Sale Lease Back Program.

This pilot for this leaseback program started in California and is starting to gain attention. The most recent headline stated that Wells Fargo is now endorsing the notion of the SSLB. The way the program works is, treasury issued a supplement to HAFA guidelines allowing “servicers the discretion to approve sales to non-profit organizations with the stated purpose that the property will be rented or resold to the borrower, so long as all other HAFA program requirements are met.”

In other words, if you or your agent is able to find a non-profit organization willing to purchase your home and lease it back to you, you may obtain a minimum 3 year lease to stay in the home while having the option to buy back your home at a set price. The rental rate will be based off the comparable market rental rates in your area.

What do you think about this program? Our experiences with these types of programs have been abysmal as we have seen cases of homeowners who joined the leaseback program but immediately struggled with an increase in rental rate forcing them to vacate due to non-payment. Many of these situations were fraudulent and those involved were penalized.

We are not claiming that this is what the non-profit companies would do but in our opinion, one of the mains reasons to short sale is to lower your monthly house payments by temporarily downgrading your living situation in order to rebuild credit and save up for your next home. If you decide to remain in your home, you will most likely have a small discrepancy between your previous & new payment amount.

Thoughts? Do you think the Short Sale Leaseback Program is a viable option for homeowners? Post your comments below!

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FOR IMMEDIATE RELEASE                          For more information, please contact:

Michael Collins, CDPE, SFR, BPOR

Local Agent Provides Alternatives for Homeowners Facing Foreclosure

Online report outlines alternatives to foreclosure for distressed homeowners in Dane & Rock County Wisconsin, including Janesville, Madison, Milton, Stoughton, Oregon, Monona, Edgerton, McFarland, Evansville, Verona, Fitchburg, Brooklyn & .

CDPEReflectionLogoJanesville, WI – (3/19/2013) – Local CDPE-designated agent, Michael Collins of Rock Realty, has developed a website providing information describing several opportunities for homeowners to avoid the negative financial impact of foreclosure.

This community resource is available at and defines foreclosure alternatives including short sales, loan modifications, and forbearance.

“It’s a concern to me that so few in our community know their options when they start to fall behind on mortgage payments,” Collins said.  “If they act quickly and get informed, they can make informed decisions to find financial stability.”

Foreclosure alternatives such as short sales—which now make up over one-third of real estate closings across the nation—are an increasingly popular way for both homeowners and lenders to minimize their losses in this tough economy.

“More lenders are realizing that they can save money in a short sale versus a foreclosure, and are more likely than they were three years ago to approve a short sale offer.” Collins said.  “This is good news for homeowners because they now have more options than ever.”

The CDPE designation Michael Collins has acquired provides real estate professionals with specific understanding of the complex issues confronting distressed homeowners.  Through comprehensive training and experience, CDPE-designated agents are able to provide solutions for homeowners facing financial hardship in today’s market.

For more information about the CDPE Designation, visit www.

IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage 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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Short Sale vs Loan Mod vs Refinance

The three big options for homeowners are short sales, loan modifications and refinance. What have you seen that actually worked?

Options: Refinance, Loan Modification, Short sale.


Basics: Refinancing is when you are paying off your old loan with a new loan with lower interest rates.

  • The goods: This option is suitable for those who plan on staying in their home for awhile and/or those who are in an adjustable mortgage rate situation and want to solidify a fixed interest rate.
  • The bads: You will be paying closing costs when you refinance and in order to refinance, you must have equity in your home.

Loan Modification

Basics: A Loan modification is typically when you modify the current loan to make payments more affordable via lower interest rates and/or extending the duration of the loan (30yr to 35yr).

  • The goods: Loan mods can be a means to prevent foreclosure when you are delinquent on payments. Lowering payments could result in a more affordable living situation.
  • The bads: Back in 2010, the Today Show reported loan mods helped only 5% of applicants. Yes, it does lower payments and prevent foreclosure but it does not lower the 5 hidden costs of homeownership. The home may still be above your affordability level. In the long run, a loan mod would prolong the problem and not fix it as you are simply extending the term of the loan thus paying more payments/interest and not building equity.

Short Sale

Basics: A Short sale is when you sell your property for less than what is owed and negotiate the difference with your lender.

  • The goods: A short sale allows the homeowner to walk away from their home and in most cases, be forgiven of the remaining balance owed to the lender(s). Normally there are taxes involved with the forgiven balance. However, until the end of 2013, the Mortgage Forgiveness Debt Relief act grants immunity on primary residences.
  • The bads: A short sale will put a ding on your credit score and it will take about 90-120 months to complete one.

These are just the basics but would love to know what your experience is on each of these options.




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In my previous blog post, I estimated that in 2014, home prices were expected to rebound. 2012 however surprised all of us with sharp price increases. What is causing this price increase? A number of factors may play into it but one of the main variables is the lack of supply thus increasing demand and prices. It is a seller's market and will probably remain until the latter half of this year. However, I don't believe this will last.

Based off our research, there is a artificial lack of inventory meaning, home prices may very well halt its increase and decline for some time. Let's explore why short selling now would be in your best interest.

What will the status of the housing market be in the next couple of years? Only time can tell. What we can investigate are the factors that led to the volatile home prices.

We are seeing large hedgefund investors like blackstone and other cash investors, buy out most of the inventory. Concurrently, new legislation as seen in California, Oregon, Nevada, and Washington, are slowing down the foreclosure flow in those areas which according to Daren Blomquist, VP of RealtyTrac, will result in a backlash of foreclosure activity at the end of this year and into 2014. RealtyTrac is still expecting to see about 600,000 REO's enter the market in 2013. This indicates a hit on home prices to come.

At the same time, homeowners are vulnerable to a large tax liability at the end of this year. The mortgage forgiveness debt relief act is set to expire Dec. 31, 2013. For more information, please read our previous blog post.

A short sale is when you sell your home for less than what is owed. The remaining balance owed is negotiated so if home prices decrease, the difference between the sale price and the amount owed will only grow meaning you have a higher risk of owing more to your lender after you short sell your home.

Moral of the story, no one can fully time the housing market but the uncertainty should create urgency this 2013 year.

Hope this helps




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It’s a sign of the times!

Most of us grew up thinking that if we planned well and played by the rules, we’d never have to stand by as our financial lives unraveled.

But upheaval on Wall Street, unacceptable rates of unemployment and plummeting real estate values have taken their toll.  Since 2007, 7.9 million homeowners have lost their homes to foreclosure. Current estimates are that one in four homeowners owe more on their mortgages than they could get from the sale of their home. Millions more homes will be lost to foreclosure before this real estate crisis runs its course.

The sad fact is that foreclosure is not an isolated event. For months leading up to the loss of a home, financially strapped homeowners live under a cloud of uncertainty.  And then for many years afterwards, the blow to credit gets in the way of buying another home or buying anything on credit. Foreclosure even complicates employment prospects.

The impact of foreclosure is huge and the sad fact is that it’s often avoidable.


As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with options to foreclosure, ensure that they steer clear of scams, and help navigate them through the solution that best meets their needs.

Among the most important facts to keep in mind: the sooner help is sought, the better the options.

These are tough times, but more help is available than ever before. If you or someone you care about is ready to navigate away from the dark cloud of an unmanageable mortgage and realize that hope and blue skies are within reach, contact me today and let’s get started.

What are your 10 Options to Avoid Foreclosure?


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Many people ask me whether we made a mistake in our company name, Short Sail Solutions. The answer would be no. Short Sailing is to signify completing a short sale like a short sail (sail –> breeze -> streamlining a short sale).

Short sales have certainly become more streamlined mainly due to a national increase in understanding the process and nature (lenders, servicers, buyers, sellers, and agents) of short sales and also through the contribution of government intervention and policy changes in government sponsored enterprises. However, short sales are still a challenging task and in order for homeowners and agent’s to minimize problems and maximize results, let’s explore 8 ways on how to streamline your Short Sail.

*Information from &

  1. Setting Expectations. Set expectations prior to starting the short sale. Thoroughly understand the situation and the objectives. Clearly define what the short sale process will entail and the motivation and cooperation it needs to get one completed.
  2. Collect short sale package documents at the listing appointment.
  3. Title examination. Have the title officer run a Statement of Information/a preliminary title when the listing is taken.
  4. Accurate and on time document submissions. Make sure you submit all requested documents to the lender/servicer on time.
  5. Communicate often with all parties. Keep the lender/servicers and all other parties satisfied by following up with them and making sure everyone is on the same page. Keep pressure.
  6. Meet the BPO/appraiser at the inspection. Make sure they are obtaining an accurate value of the listed property. Having to deal with value disputes after the inspection can delay the sale.
  7. Escalate to higher authority when needed. If you don’t already have a designated person you work with within each bank, make sure you are escalating to a higher authority to help you move forward.
  8. Be organized. A short sale involves a lot of documents. Make sure they are organized or my recommendation is to use short sale programs that are available to help you organize all docs online.

Short sales can be a breeze if you continue educating yourself on how to do it. We are based in Washington State. Let us know if you have any questions or comments by writing them below or email me at

Hope this helps


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If you are one of the smart homeowners who were involved in mortgage restructuring or a short sale in 2012, tax time is an IMPORTANT season for you. There are tax implications associated with debt cancellation/mortgage forgiveness. For those who have been involved this year, here are instructions and tips from Seattleshortsaleblog on how to take advantage of the Mortgage Forgiveness Debt Relief Act that was extended until 1/1/2014!

Here is an example of your liability if the debt relief act did not get extended or if you do not follow tax instructions posted here: Example: If you owe $150,000 on your home and it sells in a foreclosure auction for $100,000, the amount remaining of $50,000 would be taxable income. If you are in the 25% tax bracket, you will have to pay the IRS $12,500 in taxes on the foreclosure.

The Mortgage Forgiveness Debt Relief act allows you to exclude this income on your taxes but you must take action.

Here are instructions directly derived from the IRS Website. Read the full page HERE

If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and this form must be attached to your tax return.

Do I have to complete the entire Form 982?
No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

TIPS For Mortgage Forgiveness from TurboTax: Dealing with incorrect 1099-C forms
If your lender has reduced or eradicated your debt under a short sale or mortgage restructure, it will send you IRS Form 1099-C at the end of the year, showing the amount of the debt forgiven and the fair market value of the property. Review the document carefully and compare it to your own figures. If it contains misstatements, contact the lender and attempt to have it correct the form. If it is not able, or not willing, to do that in a timely manner, recalculate the correct figures and provide the IRS with documentation showing how you arrived at your figures when you file your income tax return.

It is vital to follow these steps after any type of mortgage forgiveness. Please read through these instructions & tips. Also, make sure you are reboosting your credit!

Feel free to contact me at

Good luck!



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Short sales are notorious for their duration to close. It was only years ago when we saw short sales take sometimes up to 2 years to close, causing insurmountable stress to all parties, especially to the seller. So why do short sales take so long? One could easily blame the banks for the delay. However, that accusation does not apply to most banks in 2013. Systems have been upgraded, buyers are buying, and incentives to short sell for both banks and sellers have boosted. So why would a short sale take so long?

Homeowner Motivation

We set expectations from the beginning with all of our clients. A short sale is great deal for the homeowners but it will require about 90-120 days of effort to get the job done. Agent’s who have done short sales will know this. Homeowners who delay in submitting requested documents are the ones who end up prolonging the deal longer than it should and/or losing their home to foreclosure. The lack of motivation on the homeowner’s part will diminish the motivation of the other players.

Who are these other players? The banks/lenders and the buyers.

Bank/Lender: If you’ve ever dealt with them via a loan modification process, you will know they need accurate documents in a timely fashion. Documents have an age. They will ask you to resubmit your paystubs or bank statements if they are outdated. I’ve heard many files closing because of the lack of recent seller documentation.

There could also be two liens meaning you will have to submit the package to two banks and deal with another party. Often times, the second lien is not easy to deal with because they typically receive a much smaller payoff.

Buyers: A couple of years ago, the buyers were one of the most difficult parties to retain in a deal. Buyers are much more motivated now because of the low inventory but put yourselves in their shoes. You have money (cash or preapproved) and you have opportunities around you. There is usually an emotional tie into buying a home. If you have to wait more than 3-4 months on a home, how likely are you to lose that emotion and run off to another opportunity during those 4+ months?

Short sales are like a 3-4 month boot camp. We have been fortunate with our clients thus far but we’ve also set expectations from the beginning. Agents, please show your clients this article before starting them off on a short sale or you could easily waste 4+ months of time, energy, and money. Article here:

The listing agent is another player and is the most important one and as you can read in my many articles, I have high expectations for them.

Hope this helps

Peter from

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Dedicated to bringing homeowners across the nation the latest news on short sales, we’ve discovered new information on the Home Affordable Foreclosure Alternatives program (HAFA) for 2013. Let’s explore the updates on HAFA’s success for 2012, what these new policies are for 2013, and when they will be in effect.

For those who do not know what HAFA is, it is a short sale program that is a part of the Making Homes Affordable (MHA) program run by our Government. Their success has been increasing with the latest data showing completed short sales for October at 38,518 which is a 13% increase from September. New and improved policy changes continue to incentivize lenders and homeowners to complete short sales through HAFA.

What Are These New Policy Changes?

Data provided from

Here are some of the significant updates:

  • The decision on a borrower’s request for a short sale must be made by the servicers within 30 days as opposed to the previous 45 day policy.
  • Introduction of the “pre-determined hardship.” If the borrower is delinquent on payment 90 days or more and has a FICO score less than 620 (probable if 90 days late), then they are considered to have a pre-determined hardship. However, they still need to execute a hardship affidavit prior to closing the sale. Lenders will not have to further validate the hardship.
  • HAFA provides short sales for non-delinquent borrowers who own non-owner occupied properties and offer relocation assistance to the tenants who are occupying the space at the time. This is an old but modified policy.
  • Another change involves the solidification of the sale to be an “arms-length” transaction. This means no money between the buyer and seller is given or received without it being reflected on the HUD 1 Settlement statement.
  • Treasury increased reimbursement amounts to up to $5000 (increase from $2000 previous) to primary mortgage investors for payments to the subordinate lienholders.
  • Fraud prevention is increased by stating a resale of a HAFA short sale cannot be made 30 days after closing. Also, HAFA short sale resale’s of more than 120 percent are not allowed if they occur between 31 and 90 days after closing.
  • Certain HAFA documents are now optional such as the SSA, DIL agreement, Request for Approval of Short Sale (RASS), and Alternative Request for Approval of Short Sale (Alt RASS).

When will these updated policies go into effect?

The HAFA policy updates are set to be in effect February 1, 2013 but changes may be implemented earlier by servicers.

Hope this helps!


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January 2013 – HAPPY NEW YEAR!

Greetings!  I want to quickly update everybody on some new Real Estate news that everybody needs to know:

  1. The Attorney General of Nevada launched a “new” program called Home Again.  It makes it easier for distressed homeowners in Nevada facing foreclosure to determine what state or federal assistance may be available to them with a single “one-stop”, free resource – long over do! It is a single source for all distressed homeowners in Nevada to contact. It is specifically aimed to:
  • Homeowners seeking loan      modification
  • Borrowers current but      underwater
  • Those who lost homes to      foreclosure
  • Households working towards      homeownership

Friends, family, neighbors just need to call 1-855-457-4638

For more information, go to or to the Attorney General’s website.

Upon calling the toll free number (I waited for about 15 minutes on hold,) then spoke to a very knowledgeable person that explained the process. Upon reaching someone at the Home Again program, they will give you some information on the phone and then you will be transferred to a HUD approved counselor to make an appointment.

  1. Short Sales remain a staple in our market and for the foreseeable future.  Congress has extended the certain provisions of the Mortgage Forgiveness Debt Relief Act, HR 3648, until December 31, 2013. This gives debt relief on your income taxes for just one more year!  This act benefits qualified homeowners who may have otherwise owed taxes on forgiven debt after going through a short sale.  If anybody is thinking about doing a short sale this is the time to act.  Who knows, with prices going up a short sale may not be necessary!  Call me – Kevin Bown!

If your friends, family and/or neighbors are facing possible foreclosure, have them give me a call 775.813.2387. There are alternatives. There is help out there with the HAFA, HEMP, and other Federal programs.  The state’s Hardest Hit Fund Program (they still have funds available!) is another great resource.  My advice is free.  Your referrals are appreciated! 

It is a great a time to buy and to sell!

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The Consumer Financial Protection Bureau is finalizing the “Ability-to-Repay” rule which requires lenders to obtain and verify information to determine whether a consumer can afford to repay the mortgage. Our belief is the 2013 ATR final rule will dramatically alter the residential mortgage market making it more difficult to obtain another mortgage.

"It should be emphasized that a mortgage loan that is not a "qualified mortgage" and that does not meet the ability-to-repay requirement would subject the creditor and subsequent assignees to, among other things, civil liability under TILA and provide the borrower with a defense to foreclosure. In addition to actual damages, statutory damages in an individual or class action, and court costs and attorneys fees, the Dodd-Frank Act also amended TILA to include special statutory damages for a violation of the ability-to-repay requirement equal to the sum of all finance charges and fees paid by the consumer, unless the failure to comply was not material.2"

Based off this information, we can infer that lending practices will be tighter and obtaining another mortgage will be more difficult for most to-be homeowners. If creditors now have penalties in the event that they do not fully qualify the borrower, then we can reasonably assume they will shift their lending to only those who they deem are “low risk.”

"A creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms."4

To be clear, we are not criticizing or opposing this new rule as we don’t want to see another subprime mortgage crisis on our hands. However, current homeowners need to understand that their actions with their current home will determine their ability to obtain another mortgage in the future.

Rather than going through the whole foreclosure vs short sale debate, we’ll make this simple. Put yourself in the underwriters shoes and the new ATR rule now passed. You have two applicants with one credit report showing a Foreclosure and another showing “Paid for less than original amount.” According to Experian, most lenders typically report a short sale as a “settled” account.

Who do you think will obtain the loan and get to live in their new house?

Feel free to comment on what you think about the new Ability to repay rule. Thanks!


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If you are at risk of foreclosure, you might want to know what the consequences are in the event that it happens to you. The evident and inevitable effect a foreclosure has is the ding on your FICO score as well as the foreclosure stamp on your credit report. This will make it very difficult for you to obtain any credit or even find alternative housing or employment. However, is that all to the negative effects of a foreclosure? Let’s explore deficiency judgments after foreclosure.

Recourse vs Non-Recourse State

In every state, there are different foreclosure laws regarding whether lenders can pursue you for the remaining balance after a foreclosure or not. Check HERE to see if your State is a recourse or non-recourse state.

If you are in a recourse state, then it is possible for your lender to sue you and obtain judgment for the remaining balance owed. If a judgment is entered against you, they may be able to garnish wages and/or seize any non-exempt property you owe. Although not likely, they may even be able to seize your vehicle but this of course depends on the state specific laws. It might be worth it to do a bit of research on the subject.

If you are living in a non-recourse state, the foreclosing lender cannot pursue but you are not off the hook yet!

Any otherlenders (2nd mortgages or even 3rd or 4th) ARE able to pursue you for the remaining balance.

We at seattleshortsaleblog have received numerous requests for help in dealing with subordinate lienholders whom after the home was foreclosed on, is now pursuing the homeowner via threatening judgment, judgment, or the popular strategy, selling off the debt to collection companies.

We feel it is better to pursue a short sale, and get a deficiency waiver prior to closing the sale. Those 10 words on the approval letter, “we hereby release our rights to collect a deficiency judgment” (or verbiage similar) are VERY IMPORTANT and in our opinion, better than hoping the lender will not come after you after foreclosure.

Hope this helps


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