Foreclosure Solutions, Short Sale Expert RE/MAX South Shore Realty

Myth #5 Get the Facts on Foreclosure

2011-03-23T13:18:00.001-07:00

he final video in our Get the Facts on Foreclosure series combats the myth that you should give up and face foreclosure if you are having trouble reaching your lender.

Whatever you do, don't walk away from your home and don't give up! Lenders are working hard to answer calls from homeowners in situations like yours and it may take more time than you'd expect to get through. Reaching out as soon as you think you may fall behind on your mortgage is key -- the sooner you connect, the better the chance they can help you.

For more resources on getting help with your mortgage, go to: http://www.freddiemac.com/avoidforeclosure/

Myth #4 Get the Facts on Foreclosure

2011-03-23T13:14:00.000-07:00

The fourth video in our series, Get the Facts on Foreclosure, addresses the myth that all offers for mortgage assistance are scams.

Unfortunately, scam artists often target homeowners like you who are struggling to meet their mortgage payments or sell their home, and do not have your best interest in mind. However, not all offers for help are scams. Any communication from your lender should be answered immediately -- especially if you have already missed a mortgage payment. Your lender wants to help you! If you believe you've been the victim of mortgage fraud, report it immediately! (http://lcintake.serveronline.net/intake-basic-qualify.aspx?source=Freddie)

Myth #3 Get the Facts on Foreclosure

2011-03-23T12:51:00.000-07:00

This is the third video in our Get the Facts on Foreclosure series. Here we address the myth that if you are late on one mortgage payment you will lose your home.

Myth #2 Get the Facts on Foreclosure

2011-03-23T12:30:00.000-07:00

This is the second video in our Get the Facts on Foreclosure series focusing on the myth that you should stop making your mortgage payment to get assistance. Don't stop paying your mortgage! You do not have to be behind on your mortgage payments to get help.

Myth #1: Get the Facts on Foreclosure

2011-03-23T12:18:00.000-07:00

In this video we examine the myth that if you lose your home to foreclosure, you'll never be able to buy a home again and your credit will be ruined forever.

What In the World Is HAFA?

2011-01-07T12:19:00.000-08:00

Explanation of the new HAFA Short Sale and Deed In Lieu Program from CDPE, the Certified Distressed Property Experts.

RE/MAX Investors Zero In on Short Sale Homes

2010-10-25T11:28:00.000-07:00

Hear how investors have found value in today's real estate market. Experienced RE/MAX agents can help investors find short sale and distressed properties and identify ideal investment opportunities.

FHA Guidelines Buying A Home After A Short Sale

2010-09-17T12:09:00.000-07:00

FHA Guidelines Buying A Home After A Short Sale
by admin on January 5, 2010

The Department of Housing and Urban Development (HUD) released a letter to lenders regarding borrower eligibility for a new Federal Housing Administration (FHA) mortgage after pursuing a short sale.

Here is the actual language from the new FHA Guidelines:
FHA Guidance on Short Sales Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to take advantage of declining market conditions, and purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.
Reference: For detailed information on converting existing principal residences into rental properties, see 4155.1 4.E.4.g

Here is the exception:
Guidance on Borrowers current at the time of Short Sale Borrowers are considered eligible for a new FHA-insured mortgage if they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and the proceeds from the short sale serve as payment in full.
Reference: For detailed information, see “Short Sales” at 4155.1 4.C.2.l.

Translation: If the homeowner/ borrower didn’t miss any payments prior to doing the short sale AND their overall credit history will allow…they CAN buy immediately following a short sale using FHA financing. The focus seems to be on rewarding those who made their payments on time..and did a short sale VS. those who missed payments prior to a short sale.

More info:
Guidance on Borrowers in default at the time of Short Sale Borrowers in default on their mortgage at the time of the short sale (or pre- foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.
Reference: For detailed information, see “Short Sales”, at 4155.1 4.C.2.l.

Translation: Borrowers CAN use a new FHA-insured mortgage if they were current on their previous mortgage and other debts at the time of the short sale and if the proceeds from the short sale serve as payment in full.

Bottom line, missed payments = no FHA financing…for 3 YEARS. If a borrower executes a short sale while in default on their mortgage would not be eligible for a FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Some lenders can make exceptions if the default was due to circumstances beyond the borrower’s control such as the death of the primary wage earner.

Anyone eligible for the Home Affordable Foreclosure Alternatives program (HAFA) would not be eligible for a new FHA-insured mortgage for three years. WHY? Because to qualify for HAFA the homeowners has to MISS PAYMENTS! Under HAFA, the US Treasury Department provides incentives to servicers, banks and investors to pursue a short sale for seriously delinquent borrowers.

Tax credit closing deadline extension passes

2010-07-02T06:28:00.000-07:00

Congress has approved separate stand-alone bills that extend the closing deadline for claiming the federal homebuyer tax credit and temporarily reinstate the National Flood Insurance Program -- both are issues of paramount importance to tens of thousands of homebuyers trying to close deals under contract.

Legislation that extends until Sept. 30 the closing deadline for claiming the homebuyer tax credit -- HR 5623, the Homebuyer Assistance and Improvement Act of 2010 -- was passed by the Senate

HAFA Short Sale Plan

2010-05-12T12:54:00.000-07:00

What's happening in the housing market? What's being done about it? Learn about the government's new HAFA program, providing foreclosure avoidance options including short sales and deeds-in-lieu of foreclosure. Here's the big picture, clearly explained.

Fannie Mae sweetens offer to avoid foreclosure

2010-04-28T11:13:00.000-07:00

Fannie Mae sweetens offer to avoid foreclosure

WASHINGTON – April 26, 2010 – Struggling borrowers who give up their homes through a "deed in lieu of foreclosure" or a short sale will be able to obtain a new Fannie Mae loan in two years. Currently, these owners must wait at least four years.

The new policy, which takes effect in July, is designed to make foreclosure alternatives more attractive. The policy applies only to Fannie Mae's willingness to approve a mortgage, however. Homeowners' credit scores will still take a hit following a short sale or deed in lieu of foreclosure.

To qualify for a mortgage after the two year wait, Fannie Mae says borrowers must make a 20 percent downpayment; but those who lost a job or have other extenuating circumstances will be able to make a 10 percent downpayment.

Freddie Mac – which, with Fannie Mae, insures over half the mortgages in the U.S. – currently makes homeowners wait four years after a short sale or deed in lieu of foreclosure before it will back a new mortgage. Owners who go through a foreclosure wait five years. For both Fannie Mae and Freddie Mac, the waits can be shorter in some cases if borrowers show extenuating circumstances.

For Sale Short Sale Properties

2010-04-12T11:20:00.000-07:00

Short Sale Propertes located in the South Shore Area of Hillsborough County Florida, cities of Riverview and Ruskin.

Graceful Exit from Your Home

2010-04-06T09:42:00.000-07:00

Avoid Foreclosure Know Your Options

Short Sale Option for the Financially Distressed Seller

2010-03-29T11:44:00.000-07:00

Short Sale Option for the financially distressed seller with David Knox
Jennifer Pichette-Fieo The Short Sale Option

Fast Facts Short Sales & Foreclosures

2010-03-22T11:51:00.000-07:00

Over 45% of the homes sold nationally in Jan 2010 were short sales. NAR

Nationally, more than five million households are behind on their mortgages and risk foreclosure. RealtyTrac

How many foreclosed homes are really out there? No one can say for sure, but the number seems to be somewhere between 500,000 and 1 million. NAR

Over 500,000 foreclosure cases clog Florida State courts. In Pinellas, Pasco and Hillsborough, the mortgage default case load exceeds 50,000. In February, lenders sued 3,880 Tampa Bay homes for foreclosure, according to RealtyTrac. In January 4,404 properties got initial foreclosure notices. FAR

Over 33% of the properties currently listed for sale in the South Shore Area are Short Sales. (Apollo Beach, Gibsonton, Riverview, Ruskin, Sun City and Wimauma Florida).
1876 Active, 634 Short Sale, 46 Bank Owned

Over 26% of the properties that have sold since January 1, 2010 in the South Shore Area were Short Sales. 493 Sold; 130 Short Sales; 70 Bank Owned

Over 49% of the properties currently listed for sale in Riverview Florida are Short Sales.
687 Active, 337 Short Sales, 21 Bank Owned

Active Listings for Apollo Beach, Brandon, Gibsonton, Lithia, Riverview, Ruskin, Seffner, Sun City, Valrico and Wimauma Florida. 3013 Total Active; 1070 Short sale; 82 Bank Owned

Sold Listings since January 1, 2010 for Apollo Beach, Brandon, Gibsonton, Lithia, Riverview, Ruskin, Seffner, Sun City, Valrico and Wimauma Florida. Sold 836. Short Sales 226, Bank Owned 153 and Traditional 457

Taking effect on April 5, the latest Obama program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through short sale. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed. US Treasury

In Danger of Foreclosure?

2010-03-19T10:19:00.000-07:00

Are you or somebody you know in danger of Foreclosure?

If so, I may be able to help. Here's how:

* For lenders, foreclosure is the last resort, one they wish to avoid if at all possible.

* They may be open to other options, ones that can help you avoid foreclosure and the drastic effect on your credit.

* Options include modifying the loan to make it affordable, or a short sale, where the lender approves the sale of your home for less than the balance of the loan. This can have far less of an impact than a foreclosure on your credit.

If you've missed payments, or are on the verge of doing so, don't waste anytime. Call me today. I have the knowledge and the experience to help you navigate the rough waters of today's economy.

I can't guarantee I'll be able to help you stay in your home. But I promise you that I'll work with you to arrive at the best possible outcome for your particular circumstances.

Government Short Sale Plan

2010-03-18T12:25:00.000-07:00

RE/MAX CEO Margaret Kelly explains how homeowners can avoid foreclosure with the newly announced government short sale plan.

Questions about the Simplified Short Sale Process

2010-03-03T11:10:00.000-08:00

What is a short sale?In a short sale, a lender agrees to let a homeowner facing financial hardship sell a home for less than the mortgage owed. A short sale is an attractive alternative to foreclosure, typically not pursued until after other efforts to keep the owner in the home have been exhausted. There are potential tax consequences that should be discussed with a tax professional.

Why is a short sale better than foreclosure?Typically, a short sale is less damaging to the borrower’s credit. The former owner can qualify for a mortgage backed by Fannie Mae or Freddie Mac to buy another home in as few as two years – far sooner than if there had been a foreclosure. Short sales also help protect other property values in the community by keeping the home out of potential disrepair.

Why has the U.S. Treasury issued new short-sale guidelines?Because of the challenges many homeowners have faced in their attempts at short sales, RE/MAX International has worked closely with major lenders, the U.S. Treasury and other federal agencies to streamline and standardize the process. The new guidelines are in response to this advocacy by RE/MAX and others in the industry. Short sales are seen as a critical component in stemming the increasing number of foreclosures and stabilizing the housing market. More than 75 percent of the mortgages in the United States are covered by the recently streamlined short-sale guidelines issued by the U.S. Treasury Department.

What’s been improved in the short-sale process?Under the Treasury’s Foreclosure Alternatives Program, mortgage servicers have 10 business days to respond to a short-sale offer. In the past, a lack of timely response has been one of the main reasons for delayed or derailed short sales. Also, paperwork and documentation are now standardized. Previously, such procedures varied widely between lenders. Various deadlines in the short-sale process also have been standardized.

What’s improved for the homeowner?Under the Treasury program, a successful short sale will release the borrower fully from the primary mortgage obligation. This lender will not pursue a deficiency judgment. Additionally, homeowners who complete short sales are eligible to receive $1,500 to offset the expense of moving from the home.

What’s the incentive for a primary lender to approve a short sale?
Using program guidelines, lenders will determine a minimum acceptable offer for the property. Typically a lender’s loss on a short sale is less than the loss it faces should the property go into foreclosure. Through the Treasury program, mortgage servicers receive $1,000 for every short sale closed.

How does the program Work?
If the owner of a principal residence does not qualify for refinancing and has exhausted Making Home Affordable loan-modification options – or if they make a direct short-sale request to a lender in the program – the lender determines if a short sale is possible. If it is, the borrower is given at least 120 days (up to a year, depending on local market conditions) to sell the home using a real estate agent experienced in the local market. Meanwhile, the foreclosure process can move forward, but it cannot be finalized until after the marketing period has expired.
During the marketing period, lenders must respond to a fully completed “request for approval of a short sale offer” within 10 business days.

What’s the best Way to find a real estate agent to handle a short sale?
Call Jennifer Pichette-Fieo. I am in your market area and have the following designations: Certified Distressed Property Expert (CDPE) and Short Sale Foreclosure Resource (SFR).

Does the borrower continue to make primary loan payments during the
short-sale marketing period?
Yes, in some cases. The amount is determined by the loan servicer in accordance with terms of the Treasury guidelines. If there is a payment, it cannot exceed 31 percent of the borrower’s gross monthly income.

What if there’s a second mortgage, home equity line of credit or other
Junior lien?
The borrower is responsible for either paying off such debt or negotiating release from the debt and any potential for deficiency judgment. An experienced RE/MAX short-sale expert can help you with this process. The Treasury program provides some financial incentive for junior lenders and investors who hold such loans to participate in the short sale and release the liens

Are there restrictions on who can make a short sale offer?
Yes. Among the program’s many restrictions are requirements that the property not be sold to a relative and not be occupied or repurchased by the former owner. The buyer may not receive any funds from the transaction and cannot sell the property for at least 90 days after closing.

Is a short sale the only alternative to imminent foreclosure?
If a short sale is not successful, the lender can opt to take a “deed in lieu of foreclosure.” In this process, the homeowner gives clear title to the property to the lender. Under terms of the Treasury program, the borrower is released from the remaining mortgage obligation and can still receive the $1,500 for relocation expenses. The borrower then has 30 days to vacate the property. In some cases, it’s possible to pursue a “deed in lieu of foreclosure” without first pursuing a short sale.

Is there an expiration date for the Treasury program?
Borrowers have until Dec. 31, 2012, to enter into a short-sale or deed-in-lieu agreement with their lender under terms of the Treasury program.

Are short sales still possible for borrowers and lenders not covered by
The Making Home Affordable Program?
Yes. Short sales remain possible for borrowers with mortgages not covered by the Treasury program’s incentives and guidelines. RE/MAX agents with short-sale expertise can help such homeowners pursue a short sale with their mortgage servicer or investigate other possible options.

This is informational only and should not be construed as legal or tax advice. Be sure to consult with a tax professional or other professional counsel. Based on information available in November 2009. Accuracy is deemed reliable but not guaranteed.

Foreclosure Alternatives Short Sales

2010-02-22T11:04:00.000-08:00

Millions of homeowners are "under water" on their home loan and facing foreclosure. However, there are foreclosure alternatives. Learn more about the fastest growing alternative - Short Sales

Short Sale Properties Riverview Florida

2010-02-18T13:16:00.001-08:00

Will New Federal Guidelines Speed Short Sales?

2010-02-17T11:12:00.000-08:00

National Association of Realtors Managing Director of regulatory Affairs Jeff Lischer talks about the new Short Sale Guidelines that go into effect April 5, 2010.

Foreclosure Avoidance Options

2010-02-11T10:52:00.000-08:00

Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to residents for foreclosure are many, including but not limited to short sales. Following is a brief explanation of these solutions:

Reinstatement

 A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

Forbearance or Repayment Plan

 A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

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 typically result in a lower payment to the homeowner and a more affordable mortgage.

Rent the Property 

A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, can convert their property to a rental and use the rental income to pay the mortgage.

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.

Bankruptcy

 Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

Refinance

 If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

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 their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

Sell the Property

 Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

Short Sale 

If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. I can help evaluate your situation, property value, and possible options.

Understanding your options now could mean all the difference in the world.

I can help.

Real Estate Investors Zero In on Short Sale Homes

2010-02-10T13:34:00.000-08:00

Real Estate Investors Zero In on Short Sale Homes

What is a Short Sale?

2010-02-09T12:27:00.000-08:00

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

A homeowner is 'short' when the amount owed on his/her property is higher than current market value.

A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing.

A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:

Financial Hardship – There is a situation causing you to have trouble affording your mortgage.

Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.

Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. I am your local CDPE expert. I can assist you in the quick execution of a short sale transaction.

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

2010-02-09T12:24:00.000-08:00

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.

The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:

What is Cancellation of Debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.

Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
These exceptions are discussed in detail in Publication 4681.

What is the Mortgage Forgiveness Debt Relief Act of 2007?
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million if married filing
separately.

Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681.

How long is this special relief in effect?
It applies to qualified principal residence indebtedness forgiven in calendar years 2007 through 2012.

Is there a limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater, see the instructions to Form 982 and the detailed example in Publication 4681.

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.

Where can I get this form?
If you use a computer to fill out your return, check your tax-preparation software. You can also download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery.

How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2009. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982.

Can I exclude debt forgiven on my second home, credit card or car loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion. See Publication 4681 for further details.

If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses each of these exceptions and includes examples.

I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No. Losses from the sale or foreclosure of personal property are not deductible.

If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt canceled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case. An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area. See Form 982 for details.

If the remaining balance owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, may I still exclude the canceled debt from income under the qualified principal residence exclusion, even though I no longer own my residence?
Yes, as long as the canceled debt was qualified principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

Will I receive notification of cancellation of debt from my lender?
Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of $600 or more. The amount cancelled will be in box 2 of the form.

What if I disagree with the amount in box 2?
Contact your lender to work out any discrepancies and have the lender issue a corrected Form 1099-C.

How do I report the forgiveness of debt that is excluded from gross income?
(1) Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2. Any remaining canceled debt must be included as income on your tax return.

(2) File Form 982 with your tax return.

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:

(a) the federal government, or a state or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.

Can I exclude cancellation of credit card debt?
In some cases, yes. Nonbusiness credit card debt cancellation can be excluded from income if the cancellation occurred in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See the examples in Publication 4681.

How do I know if I was insolvent?
You are insolvent when your total debts exceed the total fair market value of all of your assets. Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.

How should I report the information and items needed to prove insolvency?
Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation. You were insolvent to the extent that your liabilities exceeded the fair market value of your assets immediately before the cancellation.

To claim this exclusion, you must attach Form 982 to your federal income tax return. Check box 1b on Form 982, and, on line 2, include the smaller of the amount of the debt canceled or the amount by which you were insolvent immediately prior to the cancellation. You must also reduce your tax attributes in Part II of Form 982.

My car was repossessed and I received a 1099-C; can I exclude this amount on my tax return?
Only if the cancellation happened in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See Publication 4681 for examples.

Are there any publications I can read for more information?
Yes.
(1) Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) is new and addresses in a single document the tax consequences of cancellation of debt issues.

(2) See the IRS news release IR-2008-17 with additional questions and answers on IRS.gov.

CDPE Short Sale Qualifications

2010-02-09T12:17:00.000-08:00

Distressed Property Institute CEO Alex Charfen explains the three must-have qualifications for a distressed homeowner to qualify for a short sale. Learn what most banks and servicers are looking for.

RE/MAX Agents Help Homeowners Avoid Foreclosure with Short Sales

2010-02-09T12:11:00.000-08:00

There may be another option to save you and your home from foreclosure. Short sales allow you to avoid foreclosure and salvage your credit.

Avoid Foreclosure With New Short Sale Plan

2010-02-09T12:01:00.000-08:00

If you need help, there are options that can help. One of these options is a "Short Sale".

Jennifer Pichette Fieo Foreclosure Solutions and Short Sale Expert

2010-02-09T11:33:00.000-08:00

Jennifer is your one stop shop for Short Sales and Distressed Properties. Since 2008 she has negotiated many short sales. Jennifer is a Certified Distressed Property Expert CDPE and has the National Association of Realtors NAR Short Sale and Foreclosure Resource Certification SFR.

Times can be difficult during this period of economic slowdown. A homeowner who is experiencing financial distress and/or in foreclosure represents more than just one family event, it represents a family's financial future. In a housing market like the present a REALTOR® has to understand the specific challenges that are facing homeowners. Many hardships can befall a family during uncertain times that can turn home ownership into a nightmare. There may be better options for you as a homeowner than foreclosure or bankruptcy. Options that may allow you and your family to recover much quicker with much less stress and anguish.

I believe in helping individuals and families on MainStreet first! I have received specialized training to provide you with information and options that will help you make an informed decision. Assembling a team of professionals including a Lender and Title Company to provide their expertise is necessary to complete the package.