How To Avoid Foreclosure -- A Short Sale In California?
- By Lance Thorington
- Published 06/9/2009
- Selling
- Unrated
Has the current recession changed your financial status? Have you lost your job and have become incapable of paying your bills? Do you currently own a home that you need to sell? If you're property is located in the state of California, then you may be able to take advantage of the Short Sale in California real estate program. There are however, some prerequisites that must be met prior to taking advantage of this program.
Firstly, your property must be in California. Secondly, the property must be mortgaged and that mortgage must be behind in payment by at least one month. Thirdly, the amount of your mortgage is higher than the present market value of the property. Also, if your financial situation has changed for instance, a job loss; you are unable to pay your current bills, and you do not have any savings then you could be considered for any real estate short sale.
If you purchased your home recently, and with little money down, the chances are that your property is now worth less than it was at time of purchase. This is due to the cooling of the real estate market and falling prices throughout the United States.
In the recent past, there weren't many options for homeowners who are in a bind. Usually the only option was allowing foreclosure. However, foreclosure remains on your credit score for approximately 10 years. Thankfully, this new option has allowed
troubled homeowners a way out, so to speak.
Your bank or mortgage lender would have to agree to a short sale. If it is agreed upon, a real estate agent would be mandated to find a purchaser. The house would be sold for a loss. At this point, your mortgage lender may take the loss or, more often than not, demand some repayment of that loss.
Normally, in order to minimize losses, it would be advisable to mandate a real estate agent that would agree to a smaller commission. Therefore it is recommended that you find a real estate agent prior to meeting with your mortgage lender. This may make your banker feel more comfortable with the loss that they are about to incur.
Another thing that has to be considered when discussing a short sale with your mortgage lender is cutting back on other personal purchases and spending. Your banker may feel less motivated to help you out if you are out on shopping sprees.
There is another important point that you must consider if your mortgage lender is willing to accept a loss on your mortgage: the IRS. This loss may be considered by the IRS as taxable income. That would require you to pay back the IRS in order to cover the taxes.
Although the situation is emotionally draining, meeting with your banker can help. In a recession, and in a real estate market that is hurting, more often than not, banking institutions are willing to make some sacrifices in order to avoid foreclosing and taking over the property.
Firstly, your property must be in California. Secondly, the property must be mortgaged and that mortgage must be behind in payment by at least one month. Thirdly, the amount of your mortgage is higher than the present market value of the property. Also, if your financial situation has changed for instance, a job loss; you are unable to pay your current bills, and you do not have any savings then you could be considered for any real estate short sale.
If you purchased your home recently, and with little money down, the chances are that your property is now worth less than it was at time of purchase. This is due to the cooling of the real estate market and falling prices throughout the United States.
In the recent past, there weren't many options for homeowners who are in a bind. Usually the only option was allowing foreclosure. However, foreclosure remains on your credit score for approximately 10 years. Thankfully, this new option has allowed
Your bank or mortgage lender would have to agree to a short sale. If it is agreed upon, a real estate agent would be mandated to find a purchaser. The house would be sold for a loss. At this point, your mortgage lender may take the loss or, more often than not, demand some repayment of that loss.
Normally, in order to minimize losses, it would be advisable to mandate a real estate agent that would agree to a smaller commission. Therefore it is recommended that you find a real estate agent prior to meeting with your mortgage lender. This may make your banker feel more comfortable with the loss that they are about to incur.
Another thing that has to be considered when discussing a short sale with your mortgage lender is cutting back on other personal purchases and spending. Your banker may feel less motivated to help you out if you are out on shopping sprees.
There is another important point that you must consider if your mortgage lender is willing to accept a loss on your mortgage: the IRS. This loss may be considered by the IRS as taxable income. That would require you to pay back the IRS in order to cover the taxes.
Although the situation is emotionally draining, meeting with your banker can help. In a recession, and in a real estate market that is hurting, more often than not, banking institutions are willing to make some sacrifices in order to avoid foreclosing and taking over the property.
Lance Thorington
Expert author Lance Thorington has written many articles about a Short Sale in California. Click here right now to find out how it works and how you can save your home from foreclosure. Visit http://nphsrealestate.org/short-sale/
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