50 Comments Leave a Comment

• 1. Robert Felder  |  June 3, 2009 at 7:45 am

  Is the relief act for primary home.
  What about investment property?/

• 2. Lee  |  June 9, 2009 at 1:24 pm

  Well they have done just that with me….scared the living bejesus outta myself and wife. Our home in Las Vrgas was approved by the bank for a short sale at $487,000. When the offer came in for exactly that amount the bank approved the offer however “you shall be required to sign a personal note for the shortfall of $400,000!” Obviously, if I had the $400k I would not need to sell short….however I am scared to death they will seek a deficiency on my residence in California where I have approximately $300k in equity.
  Please someone send me a solution and puit me outta my misery as I am tired of running scared of them attaching the Calif. home.

  Most Appreciated

  Lee

• 3. Brenda Freeman  |  June 22, 2009 at 9:26 am

  I owe $30 more than the current home value. On paper, it looks like I can afford the $1900/mo mortgage, paying 10+% fixed rate interest. But I am drowning in debt and have been unable to refinance. I have asked my mortgage company for a rate reduction but they refused.

  I reluctantly have accepted the fact that I just need to get out of this mortgage, and walk away from the house. I have not yet missed a payment.

  What is your advice? Should I just stop paying the mortgage and contact you once they begin action against me? How long should I wait before leaving the house?

• 4. walkaway2day  |  June 26, 2009 at 10:09 pm

  The relief act also applies to investment properties, but you must show that you were insolvent. A CPA can walk you thru that.

  Again, it’s important to state that EVEN IF a bank can pursue a judgment, it is almost always in their financial best interest NOT to, and ALL banks care about is their financial interest, period.

• 5. walkaway2day  |  June 26, 2009 at 10:14 pm

  Lee, you need to understand that the banks cant just go attach a lien. First, the have to hire an attorney to sue you (most people dont understand that a deficiency requires a JUDGEMENT, or a ruling from a judge in the county where the property is located).
  That is costly, and the reason they want you to agree VOLUNTARILY is because they are NOT going to spend the money/time trying to go after you if you dont do it voluntarily. Dont agree to sign anything like that.

• 6. walkaway2day  |  June 26, 2009 at 10:18 pm

  Brenda,

  Good questions. Once you come to the realization that you are ready to move on, the next question is HOW is the best way for you to move on? Most people contact us because they want to avoid a foreclosure and get on with life and repair their credit as soon as possible. It’s amazing how much better you will sleep at night without all the stress and headache this property has been causing you.

  Obviously, we think our unique legal approach is an ideal solution for someone in your position, because you can move on FAST. Our attorneys handle all the negotiations on the defaulted mortgage, and we replace your old mortgage once we’ve settled.

  I would recommend you submit your property online, and also call our office to discuss your situation further.

• 7. Denise  |  July 7, 2009 at 7:43 am

  Does your credit score drop by 200+ points for doing a short sale?

• 8. walkaway2day  |  July 10, 2009 at 8:34 am

  Hi Denise,

  No one will be able to tell you excatly how much your credit score will drop, as the FICO scoring system is secret and not revealed to anyone. What will happen is you will have a rolling 120 day late, and at the time that the lender takes a loss, you will have avoided a foreclosure on your credit. With FHA loans, you can be in a position to buy another home in as little as 2 years. Our process of buying the defaulted note directly from the bank is successful 90% of the time, vs the dismal success rate of short sales, at between 5-15%, which you can read about in our blog posts

• 9. Bessie Manohar  |  September 16, 2009 at 11:46 am

  I am in the same position as Lee, with an investment property in FL, being undr water, and having lost my job , I had to put it for a short sale. I had an offer , which the bank was willing to approve, but wants me to sign a contract to pay the balance . I have absolutely no clue what to do. Should I allow it to be foreclosed ? Do I have to go bankrupt ? Can they put a lien on my primary home, and my 2nd rental home in California ? I am not ever going to buy another property, So I am not worried about my credit score. Thanks a million.

• 10. Mike P  |  September 21, 2009 at 11:35 am

  I walked away on my condo. I paid $275k for it and it’s now worth $30k. The loan was with countrywide and they sucked.

  My credit score went from 760 down to 500 the first month I didn’t pay, then crept back up to 660 over the next 16 months until the foreclosure hit my report and it dropped back down to 500.

  I can’t rent a car with a debit card, can’t buy a new house or car, can’t get a cc, and all my existing cc accounts which I had for 15+ years and never late were all revoked. Anytime I want new utility service (phone, internet, electric, etc) I have to pay a few hundred dollar deposit.

• 11. walkaway2day  |  October 1, 2009 at 9:25 pm

  Hey Mike,

  Sorry to hear about your situation. I hope what you have shared will act as a real notice to people who are thinking of just letting a property go into foreclosure. It’s a BAD idea, as you see from Mike’s experience. Unfortunately, we get many calls from people like Mike, who we could have stopped the foreclosure for, but they just waited too long. Dont let that be you! Call us and we’ll show you how we can help right away

• 12. walkaway2day  |  October 1, 2009 at 9:26 pm

  Hi Bessie,

  We acquire a LOT of properties in Florida Bessie, so the chances that we can help you are good. Best thing to do is either submit your property details online, or call us at 888-673-1110 ext 2, and one of our representatives can review your situation. Chances are, we can help

• 13. Lante  |  October 3, 2009 at 10:36 am

  What happens if we have a HLOC or a second mortgage on the property?

• 14. walkaway2day  |  October 7, 2009 at 8:39 am

  Good question. HELOC’s, or second mortgages are very esy for us to negotiate. We buy the HELOC or second mortgage for pennies on the dollar directly from the mortgage holder. They have little alternative, because in a foreclosure they get NOTHING, so they are happy to take 10 cents on the dollar from us

• 15. gcuffe  |  October 10, 2009 at 10:22 am

  with fha loans you have to wait 2 yrs after a bk and three years after a short sale or foreclosure. I am a lender I know.

• 16. walkaway2day  |  October 13, 2009 at 12:41 pm

  Fannie and Freddie have updated requirements based on the Mortgage Debt Forgiveness Act, and FHA requirements have been reduced to 1 year. There are some stipulations to that, but you can qualify for FHA after 1 year, but not if you let your property go to foreclosure

• 17. STAN  |  November 9, 2009 at 3:54 pm

  Hi,
  Have six duplexes being foreclosed on Dec1.All rented except 1 and are in decent shape.What can you do for me?

• 18. walkaway2day  |  November 12, 2009 at 7:52 pm

  Hey Stan,
  We do work with duplexes, so short answer is we can probably do something on all of them, but you would have to get them submitted right away….time is very short in your case…

• 19. Steele V. Propp  |  November 23, 2009 at 9:41 am

  In Minnesota we have a six month redemption period on most properties. In the case of a short sale most lenders will still do the short sale during this timeframe. Can you work with properties in redemption as well?

• 20. Amanda  |  December 1, 2009 at 6:33 pm

  I am in the same exact situation – short sale approved but the bank wants me to sign a note saying I would pay the balance. I don’t know what to do, but I don’t feel right signing the piece of paper – - foreclose? bankruptcy? I won’t be able to pay the balance, but I don’t want this deficiency to be attached to me for the rest of my life.

• 21. Fernan  |  December 7, 2009 at 8:35 am

  My client has two loan with BA, the 2nd is a HELOC for $51K, the 1st Lien holder is paying $3K to the 2nd in order to to approve the short sale. They both have approved the short sale but the 2nd is asking my client to sign the short sale paper including a term that makes her remain responsable for the unpaid balance of $48,000 and she will be reported to the credit bureaus as a “Charged Off”. My client who is a single mother with two kids, loss her job and according her she will not be able to afford to pay the remaining balance. Can the Morgage Forgiveness Debt Relief Act protect her from paying this debt or she have to get stuck on it and pai it?

• 22. Sharon Cunningham  |  December 7, 2009 at 8:00 pm

  I asked for a loan modification, credit score of 760
  1st is 6% 2nd 8% Home Equity Loan New Condo
  Unemployed Lost Real Estate Recruiting Employment
  Completed forms and info required by Lenders Wells Fargo Mortgage 1st and Well Fargo Bank 2nd

  No reply 6 months into the process I found employment
  still sending required up-dated paper work…

  Stopped paying mortgage, thinking they would reply to lower rates/payments/ Lost job (4 month contract only)
  Leased property thinking now I have the month income to pay

  Lender turned loan over to attorney’s No reductions of rates, now I have bad credit, and a tenant I’ll need to kick out!!
  I have a short sale offer of 200,000 I owe 290,000 to 227,000 to the 1st and 50,000 to the 2nd? If they accept the short sale, since it was rented the last 3 months will they go after the remainder or Should I just file bankruptcy?
  Sharon

• 23. Sharon Cunningham  |  December 7, 2009 at 8:02 pm

  What’s the difference between a short sale and foreclosure? In the eyes of debt forgivness?
  Sharon

• 24. walkaway2day  |  December 22, 2009 at 9:28 am

  The mortgage debt forgiveness act, which is covered on this blog, is specifically for situations where the bank takes a loss, but not a foreclosure. You can read more about it on the blog posting related to the MDFA.

• 25. walkaway2day  |  December 22, 2009 at 9:30 am

  Sharon,
  Not sure exactly what your question is here…but on loan modifications, the statistics show that 70% of borrowers who do a loan modification end up back in default. It can be a short term solution to buy you time, but if you truly are unable to keep the home, then you need to look at your exit strategy closely.

• 26. walkaway2day  |  December 22, 2009 at 9:33 am

  Hey Fernan,
  No, the MDFA cannot protect her if she signs those documents. 2nd mortgages typically try the tactic that you are seeing there. And unfortunately, in your situation, you dont have much leverage with the bank to just say ‘no’ to that rediculous requirement. If we were dealing with that file, they would not even ask us to do that, because we approach them with leverage and power, from a legal standpoint. It would be in your clients best interest for you to speak with one of our affilitate team members. Perhaps it’s not too late for us to intervene

• 27. walkaway2day  |  December 22, 2009 at 9:35 am

  Amanda,
  the bank NEVER asks us to do that, because we have legal leverage that you are currently not utilizing. If you go with our service, you will NOT be required to sign any such document. It’s worth thinking about, because the last thing you want to do is go thru a short sale, only to still be on the hook to the bank. It’s unbelievable that they try to do that, but it is VERY common. Call us, and lets see if we can intervene and stop the bank in its tracks

• 28. walkaway2day  |  December 22, 2009 at 9:36 am

  Yes, we do work with properties in redemption, on a case by case basis. You can call in for a free prescreen of the property and we can tell you over the phone.

• 29. carol  |  January 13, 2010 at 9:40 pm

  what happens if the bank won’t work something out and you are foreclosed on?

• 30. walkaway2day  |  January 14, 2010 at 10:53 am

  Good question. we are successful 95% of the time, and in those rare cases where the bank is hell-bent on foreclosing, we negotiate a deed-in-lieu of foreclosure.

  To avoid that situation, we screen out properties that could prove to be problematic down the road.

• 31. Jonathan Cutler  |  January 21, 2010 at 12:21 pm

  How do you guarantee the seller that there will not be a foreclosure – which seems dependent on whether the bank agrees to a deal with you. If not, then what?

  Also, doesn’t the seller remain on the loans? If there is a foreclosure because you could not negotiate a deal with the lender, unless it was purchase money (and thus protected from deficiency) what prevents the lender from coming after the seller for the deficiency?

  And why isn’t the foreclosure attributed to Seller? Since the lender never consented to the transfer and it is possibly void as a result.

• 32. Danielle  |  January 29, 2010 at 1:41 pm

  My condo foreclosed in December 2008. I guess my condo finally sold at $29,000 in December 2009. I received a 1099-A in the mail stating that I need to report this to the IRS. The 1099-A states that the amount owed on my loan was $98,900.00 and the FMV was $110,100. It also said that I was responsible for the balance of repayment of the loan.

  Will I owe anything to the IRS? If I in turn receive 1099-C will I then owe the IRS? Will the IRS make sure I pay back the loan?

  I am really worried the bank is going to come after me for the deficiency.

• 33. tim  |  January 30, 2010 at 8:16 am

  hi there,

  due to a dowturn in business i left my employer and started my own business. i invested a lot of money and is now doing pretty good. several months back i received a letter from my home insurer that they will not renew my homeowners policy. after looking for new insurance i came to find out that no one will insure me with a roof that is 15+ years old. a new roof is $8000. i have $8000 to put a new roof on….but that would clean me out… i dont know how my business is going to do few months down the road. so i would potentially put that money into a new roof and then loose my home due to non payment of the mortgage. i am thinking about just to surrender it to the bank. i already lined up an apartment before my credit takes a nose dive. it is an FHA mortgage and the property is located in Florida by the way. what are the potential legal and financial consequences ?

  tim

• 34. Debra  |  February 3, 2010 at 8:19 am

  You did not answer Brenda’s question. Should she stop paying her mortgage? How long should she wait before leaving the home?

• 35. Lee  |  February 6, 2010 at 7:59 pm

  My first Mortgage is scheduled for Sherriff’s sale March 4 and my second mortgage issued a 1099-C forgiving the entire balance last October, but the have not satisfied the mortgage and when I called to ask how to get satisfaction they referred me to collection company. How would I sell the home after the Sherriff sale if the redemption price is low enough to work with some of the interested buyers?

• 36. Brad  |  February 8, 2010 at 12:46 pm

  I keep hearing that if you do not get the banks to put on the short sale approval letter that the borrower is released from any future responsibilities that the banks may and can seek a deficiency judgment and in AZ the anti deficiency laws do not apply to Short Sales only foreclosures. IS this ture and will the MFDA protect the borrower/seller with a short sale or is the seller subject to future judments from the bank without the written release?

• 37. Short Sale Artisan  |  February 11, 2010 at 10:14 am

  I’m surprised the bank agreed to a short sale when you had equity in another home.

• 38. Eric Pointer  |  February 12, 2010 at 9:11 am

  As far as the Debt Forgiveness Act, it only applies to the tax on forgiven debt not the debt itself. The debt may still have to be paid.

  Remember that if there is PMI on a loan the banks are frequently coming after their loss, and the bank taking the payout usually assigns the loss to the PMI provider.

  My short sale specialist Chris Sevick, Attorney at Law has worked greater than 10 of those alone lately after the owner was sued.

  Lenders CAN seek a deficiency, if not waived in the short sale, but haven’t been doing so frequently.

  The 2nd liens & those with local lenders, and especially credit unions have been filing actions for the deficiency.

  However, since the lenders have SIX years to bring the action he believes that in 18-24 months we will see a massive wave in these actions.

  Two articles addressing such were just released in the last 10 days on CNN Money.

  Plus, http://tinyurl.com/yl2kl2m, For only $1500 the lender could have a deficiency judgment of $200K. That judgment would be good for 5 years after the judgment was entered and could be renewed for 5 more.

  Essentially if done properly you could be collected 16 years after the short sale/foreclosure (6 + 5 + 5) which is just too long for many people.

  In addition now that we are seeing many for middle/upper middle income people needing short sale they don’t always have the option of a BK, or if they do it may be an expensive Chapter 11 which could cost $15,000 and cost share in a business or partnership.

  The 2nd is requiring more money from the SELLER to get the sale approved, not just the $3000 from the 1st, whereas they generally were previously taking what was offered or very close.

  Bank of America will now almost always do the short sale, not require a contribution, but reserve their right to a deficiency.

  My concern is that as we see more lenders collapse, merge, spin off & sell share we will see this deficiency debt moved from the “original” to others who will pay pennies on the dollar to try to collect.

  Essentially the original lender takes the business write-off, but somebody else collects on it still.

  Forgiven debt not the debt itself.

  The debt may still have to be paid

• 39. Eric Pointer  |  February 12, 2010 at 9:21 am

  Also, my second Short Sales Specialist Jeff Rothh commented as follows:

  Two things, the banks have taken some heavy losses and the government has made it easier for some banks to get paid from short sales and foreclosures and they are more willing to take the chance of trying to collect on a defieicncy.

  Basically, they are getting paid twice on the same debt.

  Having clients bluff bankruptcy helps in some cases but not all.

  Some of these banks are making money on short sales and foreclosures because the government has guaranteed the banks losses on bad loans that they may have taken off the hands of another failed bank.

  Since the second half of last year, I have seen more deficiency judgements after a short sales with clients than I have seen in the past.

• 40. walkaway2day  |  March 2, 2010 at 10:42 am

  Yes, our advice to Brenda would be to do a strategic default, which would entail stopping her mortgage payment. She would then assign the property to our company, so we could begin the legal process with the bank.

• 41. walkaway2day  |  March 2, 2010 at 10:46 am

  we are successful in buying the defaulted note 95% of the time. In rare cases (5%) the bank is hell bent on foreclosing. In those cases, we negotiate a deed in lieu of foreclosure for the seller. that is the worst case scenerio.

  The seller does remain on the loans while we negotiate purchasing the notes from the bank.

  Part of our negotiations with the lender is a guarantee that they will not persue a deficiency judement, which we getn in writing as part of our settlement.

  Title transfers cannot be voided by the lender. All they can do is accelerate, or ‘call due’ the note if you tranfer title without their consent. 99% of the properties we deal with are already in default, and the note has been ‘called due’ already, so it is a non issue

• 42. walkaway2day  |  March 2, 2010 at 10:48 am

  If the bank sent you a 1099-A then they will not persue you on a deficiency. They persue less than 1% of mortgages for a deficiency. People are so scared of this, and it is a complete non issue. The banks have done a very good job of scaring people into believing they will go after them.

  Regarding the 1099-A, we do not know your income situation/tax bracket, etc. You should check with your CPA

• 43. walkaway2day  |  March 2, 2010 at 10:52 am

  Eric
  We are NOT doing a short sale. We buy the note, the DEBT from the bank and part of our negotiations include an idemnification for the seller (you) so they agree up front not to persue a deficiency.

  The reasons you bring up are precicely WHY we do not do short sales. they are not effective, and open you up to continued liability

• 44. carol  |  March 3, 2010 at 5:22 pm

  After reading all the cooments I am confused abt wht u r reporting. Will I.e. Bank of america pursue a judgement def on me for my recent short sale or not

• 45. Carol  |  March 4, 2010 at 7:46 am

  I am confused. Your first statements say the bank won’t go after a judgement deficiency…then I read on it seems to be conflicting.
  Will a lien holder, i.e., Bank of America sell their file to a third party.Thus not having to pay court fees, get paid for the file and move on… The seller will then be subject to a deficiency judgement. I sold a short sale in Idaho. Because of a divorce and a job move. At first they denied the sale because I make too much money. Then, they wouldn’t consider it because I hadn’t missed a payment..so I stopped making payments. Although I make a lot of money, I have a lot going out…The house wouldn’t rent for anything and it took over a year to sell.
  What do you think my chances of having a judgement deficiency on me will be…

• 46. Charles Stevens  |  March 11, 2010 at 4:34 pm

  I have three investment properties in default. There are about 5 more coming down the pike. The banks seem to want to do a foreclosure. I wasted 12 months trying to get a modification. They would neither lower the rate or the principal, either of which I would have settled for. Now they are going to sell these as short sales or at the courthouse steps for half of what I would settle for. I write to them but they seem unable or unwilling to do a foreclosure. My only source of income are my rentals. If they go after me on deficiency, I’ll be on welfare with my wife and child. I’m 64 and have no other retirement except social security. Are they looking at my good rentals as equity to take. My life would be over. What should I do. They don’t seem to want to do a deed in lieu. I have only 60 days left on these three. I need to act fast. The rates are at 9% and the houses are worth about one third of the mortgage. These properties were costing me 50K per year, eating up all my reserves fast.

• 47. Tim Burrell  |  March 13, 2010 at 11:53 am

  I think there is some confusion here. The Mortgage Forgiveness Debt Relief Act of 2007 eliminate the income tax on debt that is forgiven in certain situations. Normally, if you do not fully pay back a loan, the amount you do not pay back is taxed as income. This act eliminated that income tax for a person’s primary residence if the debt qualified (typically debt used to buy or ijmprove the home). You claim that this act eliminates the ability of lenders to go after borrowers/sellers after a short sale. I have been an attorney for 36 years and done short sales for 17 years, so I think I am qualified to read this legislation. I do not see anything in there that affects a lender’s ability to pursue a borrower/seller after a short sale. If you want to read more about this legislatioin, go to http://www.CreateAShortSale.com and type in 2007 in the search box at the upper right. Please let me know if there is some other legislation that you are referring to, as it would be wonderful is there was such a law.

• 48. Tony  |  March 13, 2010 at 1:13 pm

  What exactly does your company do?
  I have a home I have tried to sell unsuccesfully. I am trying again. I have been renting the property but it does not cover both the 1st and 2nd mortgage. If we do a short sale there will probably be a deficiency of 50k. I have a seperate mortgage on my residence. We relocated for work three years ago. It is impossible for me to keep both properties even with a renter.I have tried to to work with the bank on a re structure. They wont. If the home doesn’t sell it will go into forclosure. I am already way behind on the 1st and a couple of month’s on the 2nd. How could your company help?

• 49. Hossein Arian  |  April 13, 2010 at 4:27 pm

  I lost my Idaho’s investment property home in the non-judicial foreclosure process. However I am the residence of California and that is my primary residence. I had only one loan on this property.

  If the lender decides to go after the deficiency judgment (what are the chances?), do they need to file in state Idaho where the investment property was or in California the state of my residence?

• 50. Alexander1&hellip  |  July 8, 2011 at 2:43 pm

  buy@aloe.vera.gel” rel=”nofollow”>……

  Need cheap generic VIAGRA?…

Leave a Comment

Name (required)

E-mail (required), (Hidden)

URL

Comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

TrackBack URL  |  RSS feed for comments on this post.