Buying a Los Angeles Home, What is a Short Pay?

What is a short pay?

I often get a request from people buying a Los Angeles home as to what the disclosure "Short Pay" means.  This is a brief overview of the process. Short Pay is actually the same as Short Sale.  A short sale means that the homeowner is upside down on their mortgage,What does this mean for a Los Angeles home buyer?The homeowner owes more on the mortgage than the home is actually worth.  Instead of sitting in the home without making the monthly mortgage payments, or strategically defaulting … [Read more...]

Buying Foreclosures in Los Angeles

Los Angeles Short Sales, Los Angeles Foreclosures, Buying and Selling Los Angeles Foreclosures

Almost every buyer I meet asks about buying foreclosures in Los Angeles, because, like everyone, they are looking for a deal.  And I always hear "I am looking for a deal." Fortunately, or unfortunately, there are no deals in the desirable neighborhoods of Los Angeles.  I use the term "no deals" loosely, because who knows, maybe someone will get lucky.  But Los Angeles was not hit like many other parts of the country.  Prices came down, but they did not plummet, and the real deals are bought … [Read more...]

When Buying a Los Angeles Home at a Foreclosure Auction Beware of Unknown Matters

Los Angeles Foreclosure Alternative Deed in Lieu, What is a Deed in Lieu of Foreclosure?

We are back to the point about buying a Los Angeles home for a bargain.  You generally get what you pay for. If you are thinking of buying a home at a foreclosure auction then beware of unknown matters that could pop up, as you will  probably not be offered title insurance on the property.  In a regular sale, the Seller will be paying for your title insurance.  You could be inheriting a bunch of problems which will make it difficult for you when it comes to selling the property. What … [Read more...]

Short Selling your Los Angeles Home – Will I Have to Pay Taxes on Debt Forgiveness?

Short Selling your Los Angeles Home, Will I Have to Pay Taxes on My Los Angeles Short Sale?

What is a short sale? If you are having a hard time paying your mortgage and owe more than the property is worth, then you may consider short selling your Los Angeles home.  What this means is that you would list the house at market price and work with prospective buyers until your come to an agreement.  Your listing agent would then approach the lender and work with them on an acceptance of the buyer's offer. This is a long and involved process during which you would have to prove hardship, … [Read more...]

A Los Angeles Foreclosure Alternative – Deed in Lieu

Los Angeles Foreclosure Alternative Deed in Lieu, What is a Deed in Lieu of Foreclosure?

We often talk about different short sale incentive programs—HAFA, TAP, Bank of America Cooperative. Some of these programs also offer options and incentives for borrowers who are considering a deed-in-lieu of foreclosure. I do not write about deed-in-lieu very much, but thought it an appropriate topic since I have gotten a few calls and emails from agents who want to 411. A deed-in-lieu is simply the opportunity for a borrower (mortgagor) or homeowner to convey all the interest in the … [Read more...]

Buying a Los Angeles Foreclosure or Short Sale, Hold on, it Could be a Bumpy Ride

Buying a Los Angeles Foreclosure or Short Sale

If you are thinking of buying a Los Angeles foreclosure or short sale you are going to have to have a lot of patience and put a great deal of trust in your real estate agent. Buying a Los Angeles Foreclosure When you are buying a foreclosure the human touch is basically removed from the process.  You are dealing with a lending machine.  There are no warm and fuzzy letters to write to the "seller" telling them how much you love the house, and how you have made your best offer and hope that they … [Read more...]

Los Angeles Short Sales and Tax Implications

Los Angeles Short Sales and Tax Implications, There May be Tax Consequences to your Los Angeles Short Sale

I had an agent ask me today about the tax implications of a short sale. He said that his seller was concerned about both the tax implications and future liability for the debt forgiven and was in the process of investigating both issues.  Caveat: I’m not an attorney or an accountant. I don’t even play one on tv. So, if you or your short sale sellers really want the skinny on the tax implications of a short sale, my best advice is to speak with a reputable accountant or tax … [Read more...]

What do Mortgage Insurance and Magic Have in Common?

Los Angeles Mortgage Insurance and Short Sales, What do they have in Common?

Today, at the monthly NAHREP (National Association of Hispanic Real Estate Professionals) meeting in San Marcos, California, I had the pleasure of speaking about short sales. After the meeting, Ken Davis approached me and asked me about mortgage insurance. Short sale aficionados (or should I call them short sale suckers?) already know that mortgage insurance is a serious beast of burden when it comes to the negotiations of the short pay. Here’s the deal—and a very long answer to Ken’s very … [Read more...]

Is the Los Angeles Short Sale Logjam Really Clearing Out?

Is the Los Angeles Short Sale Logjame Clearing Out, What is the State of Los Angeles Short Sales

Eric Wolff wrote an interesting article in the North County Times on Sunday, April 10. In the article, he states that according to local Realtors®, the short sale logjam could finally be clearing a bit. I’m quoted in the article (as are my Realtor® friends Diane Conaway of Re/Max, and Sidney Kutchuk of Realty Works). The article discusses the fact that there has been significant improvement with respect to short sales and short sale processing at the banks. While I agree that this is true, … [Read more...]

Thinking of Walking Away from Your Los Angeles Home? Make Sure You are Not Saddled with a Tax Bill

Los Angeles Short Sales, Los Angeles Mortgage Forgiveness

If you are thinking of walking away from your Los Angeles home, or doing a short sale on that home don't automatically assume that you will not have taxes to pay on the forgiven portion of your debt. There are laws in place that protect the distressed Los Angeles homeowner from having to pay taxes on the forgiven portion, but you need to make sure that you meet the requirements for this tax relief. What are the requirements for tax relief on mortgage debts forgiveness? The Los Angeles … [Read more...]

What is a Short Sale?

What is a short pay?

The definition of a short sale is the sale of real estate in which the amount yielded from the sale is short of the balance owed on a loan secured by the property which will be sold. That means that a property has more owed against it than it is worth in current market conditions. In a short sale, the lender agrees to discount a loan balance because of a seller's financial hardship. The negotiation for short sales is done with communication through the loss and mitigation department of the … [Read more...]

Foreclosures – A Dream or a Debacle?

Los Angeles Foreclosures, Los Angeles Real Estate, Los Angeles Short Sales

Are you leaning towards stepping into the investment market? You may get the idea that buying a  foreclosure is your best bet for a great deal on a home. Well, it’s possible, but remember that the foreclosure market is full of perilous pathways and competitive investment pros who know what they’re doing. Whether you’re considering purchasing  foreclosures as an investment or as your personal residence, here are a few tips that will help you get you started on a great investment and likely … [Read more...]

A Los Angeles Short Sale or Foreclosure, Which is Better?

Buying or Selling a Los Angeles Foreclosure, Buying a Los Angeles Short Sale, Los Angeles Short Sales

Should I buy a Los Angeles home in a short sale or foreclosure? Should I sell my home as a short sale or allow the bank to foreclose? These are questions faced by many Los Angeles home buyers and sellers in today's tough times. What is a short sale? A short sale is when a home owner opts to sell his home for less than he owes on the mortgage, rather than let the bank foreclose on him.  Technically the hit on his credit and future home buying power is supposed to be less with a short … [Read more...]

Buy a Foreclosure Save $100,000

Buying a Foreclosure save $100,000

Would you like to buy a foreclosure and save $100,000? Fannie Mae and Freddie Mac are trying to reduce their huge inventory of foreclosed homes by by offering to pay some of the closing cost, financing renovations and repairs, and allowing 3% downpayment. This will offer an incentive to first-time home buyers and those wanting to buy up. If you buy and Fannie or Freddie-owned property rather than a regular sale property in the same area you could save up to $100,000. Even thought … [Read more...]

Buying a Foreclosure in Los Angeles

Buying a Foreclosure in Los Angeles is not an easy process and not for the faint of heart. There are three stages of buying: Pre-foreclosure: This is when the home is in the process of being foreclosed on but has not been sent to the auctioneer's table.  This kind of sale is a short sale but can be a long, drawn-out process of negotiations.  The Seller is under water on his or her mortgage and is trying to offload the home.  The first part of the process involves a contract agreed upon … [Read more...]

Mortgage Debt Forgiveness Will Not be Taxed in California

Governor Schwarzenegger has signed into law a "mortgage debt tax relief provision" which will shelter Californians who have lost their homes in this down market. Part of bill SB 401, the provision will allow individuals to exclude up to $500,000 on the forgiven debt, or $250,000 for married individuals filing separately.  This covers only principal residences from 2009 to 2012. Homeowners would have had to pay taxes on the amount remaining on the loan as the result of a short sale or … [Read more...]