Is Calif. Short Seller debt forgiveness in peril?

Gov. Schwarzenegger vetoed a bill last week which would have been similar to the federal government's tax forgiveness on "phantom debt" for short sellers. His reason for the veto was the bill contained an unrelated provision regarding tax refunds for the state's largest businesses. Gov. Schwarzenegger is supporting the banning of taxation of mortgage debt forgiveness and called for the legislature to send him a bill to provide tax forgiveness before the April 15th tax deadline. According … [Read more...]

Lending banks are dripping out loans

Banks are Dripping out Loans and penalizing excellent buyers. It is amazing to me that no matter how much down payment a buyer has or how exceptional their credit scores it is impossible to get a loan without complications and costly delays. It seems as if the lending banks must have an intricate monitoring system that will only allow a specific number of loans within a risk analysis to be released. Logical on the lending side? Yes, Please…Could have used this in 2004. Continuing to … [Read more...]

Debt forgiveness & taxes: a split decision

Is the state of California currently pursuing tax on the deficiency amount that is 1099'd in a short sale? A post on a California Association of Realtors blog tackles the question of taxation and debt that's forgiven as part of a short sale. "infowagle" (CAR counsel Sanjay Wagle) says there's relief on the federal level -- and hope for an extension of the tax break in California. He notes: Under federal law, as a result of the Mortgage Foreclosure Debt Relief Act of 2007, for the … [Read more...]

Sellling your home Short? You are not alone!

Option ARM loans are resetting. Selling your home short?  You are not alone! Standard and Poor's reports about 93 percent of option-ARM buyers chose to pay a minimum amount less than the interest due. Many of these loans were taken out in 2004 and are close to their five-year reset when the loans convert to a standard amortization.  If the accumulated interest has pushed the loan-to-value ratio above 110 percent some of the more recent loans will reset early. One example of the … [Read more...]

Putting your hardship letter to paper

The hardship letter for your short sale package can be quite difficult to write. That's understandable. You're working through a financial puzzle that's complex and emotional. Breaking the letter down into a simple format can be an easy answer: 1. Hardships: So, what are your current hardships? Unemployment, medical problems (personal or family), disability, divorce, death, relocation, or perhaps a rise in mortgage payments due to loan adjusting. Supporting documentation is helpful (for … [Read more...]