Countdown until you owe the IRS

So what are other homeowners doing? Many homeowners that are considering a short sale or a loan modification have decided that instead of waiting for the market to come back they are opting to sell their house now and get out while the getting is good!  If you owe more than your house is worth, it will take years to break even. If you decide to sell your house BEFORE you break even, there will be debt that is settled by the lender. Pursuit of a short sale AFTER this deadline expires will be subject to additional tax liability.

"How's that Loan Mod Going?"  More Than 520,000 Trial Loan Modifications Cancelled

Over 520,000 trial loan modifications have been cancelled, including the 90,000 this month of June 2010. Only 364,000 borrowers remain in active trial modifications.

More than 40 percent of the trial loan modifications started under HAMP, Home Affordable Modification Program, were cancelled as of the end of last month, but permanent modifications totaled nearly 400,000, according to the latest Treasury report.

Of the 1,282,912 trials started, 520,814 have been cancelled, 364,077 are active, 389,198 are permanent, and the remaining 8,823 were permanent but subsequently cancelled.

The most common causes of trial cancellations included missing documentation, trial plan default, and ineligibility due to debt-to-income ratios already being below 31 percent.

Most who were cancelled were put in an alternative modification.

Bank of America now leads all servicers with 72,232 permanent modifications, followed by Chase with 54,722 and Wells Fargo with 44,628.

However, smaller loan servicers have been converting a larger share of their eligible 60+ day delinquent borrowers, thanks in part to the use of verified documentation.

Performance of Permanent Modifications

Delinquency data included in the latest report revealed that 4.1 percent of the 126,527 loan modifications made permanent in the first quarter of 2010 were already 60+ days late.

Another 1.3 percent are 90+ days late.

The numbers are 5.4 percent and 1.5 percent for modifications completed in the fourth quarter of 2009, and 10.5 percent and 4.4 percent for the third quarter of 2009, respectively.

While it's too early to really tell, the re-default numbers look lower than those tied to other modification programs.

truthaboutmortgage.com

There are many circumstances that will determine if a lender provides "Cash For Keys".

But in this particular case, the sellers did very well.  Beats foreclosure hands down.

6/24/11

Mark,

Thank you so much for all you did for us at a really stressful time.  You and Sam were on top of everything and had answers when we called you.  These are some important points that happened as we were going thru a short sale.

                Foreclosure sale date was postponed.

                Lender did not hold us responsible for the deficiency of the note.

                We received $23,000 at closing for participating in the short sale process.
                $3,000 from the HAFA Program and $20,000 from Chase.

If you know of others that are going thru the same circumstances they can call us if they would

like.  You have are numbers.

Sincerely,

Walt & Marlene Klein

Know your options - Comparison of Metro Denver area distressed sales statistics and your options when facing foreclosure

According to the National Association of Realtors, "Distressed homes were at 32 percent of sales in June, compared with 31 percent in May; it was also 31 percent in June 2009" (www.realtor.org). Loan modifications and short sales have increased because many homeowners are struggling to make their mortgage payments, have no equity in their homes, or are facing foreclosure. Denvers distressed sales are not as high as the national averages but they still have an impact on the Denver market. The chart below shows the number of distressed sales over the last year in the Metro Denver area.

When facing foreclosure, it is important to know that you have some options. Lets talk about some of these options and their advantages and disadvantages.

Loan Modifications - The government has designed many programs to help Americans avoid foreclosure. These programs have helped some, but can be difficult to negotiate, timely to obtain, and not everyone qualifies.

Short Sales - A short sale is a Real Estate sale in which the proceeds of the sale do not cover the balance of the current home loan. The lender may agree to accept less than what is owed on the property. This allows the seller to sell the property and avoid foreclosure. The sellers credit will still be damaged, but it will be minimized in comparison to a foreclosure. After a short sale, one will have to wait about 2 years before purchasing another home.

Foreclosures - When a seller is unable to pay their mortgage and the bank becomes the owner through the foreclosure process, the sellers credit is highly damaged - more so than with short sales and loan modifications. After a foreclosure, it can take 2-5 years before one can purchase another home.

Source: Denver Metrolist. Based on Information from Metrolist, Inc. for the period 7-1-2009 through 7-31-2010. NOTE: This representation is based in whole or in part on data supplied by Metrolist, Inc. Metrolist, Inc does not guarantee nor is in any way responsible for its accuracy. Data maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

Should I do a short sale or a loan modification?

What are other homeowners doing?
Many homeowners that are considering a short sale or a loan modification have decided that instead of waiting for the market to come back they are opting to sell their house now.