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...]

Short Sales: The Road to Easier Navigation & Successful Transaction

Selling a Los Angeles Home. Get Ready to List

Many recent indicators I've seen, heard, and experienced seem to point to more positives regarding the conducting of Short Sale property transactions. They're fitting the pieces of the Short Sale puzzle together a bit faster and better.      Major servicers (big banks) finally seem a bit better equipped, more willing to avoid foreclosure expenses, and more adept at handling Sellers looking to sell their properties "short".        I say, "it's about time", right?  It's been a … [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...]

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...]

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...]

With New Federal Guidelines Short Sales Should Become Easier

New Short Sale HAFA Guidelines

With new guidelines due to take effect in April, and with lenders able to implement them earlier, the frustrating process of short sales should become easier. The guidelines are part of  the new government Home Affordable Foreclosure Alternative Program (HAFA).  The purpose is to enable borrowers who are eligible for loan modification programs but are unsuccessful in their attempts, to work out a plan with their lenders to execute a short sale or deed in lieu of foreclosure (where the … [Read more...]