Underwater Mortgage, Short Sales Spur Legal Disputes

underwater mortgages Underwater Mortgage, Short Sales Spur Legal Disputes

Recent numbers have shown that over 25 percent of all United States home owners are underwater with their mortgages. What this means is that the home value has dipped below what the home owners have left to pay off on their mortgages.

In some cases a home that were purchased at $200,000 are now only worth $150,000 or sometimes even less. Many home owners have been faced with the necessity to sell their homes while they still owe more than what the home is worth. This is what is called a short sale.

The problem surrounding this  type of sale is that many home owners are not aware of what tax obligations and loan deficiencies are associated with it. When this has been the case, many of the sellers are taking legal action against the real estate agents who did not properly inform them of the different requirements of short sales.

 

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  1. Stephanie says:

    It is important to also let our distressed homeonwers know that even if they let their home go to foreclosure they may also be responsible for the defiency and will receive a 1099A. The deficiencies are typically greater in a foreclosure versus a short sale as the property HOA fees, taxes, repair, attorney fees, etc. will accrue. A short sale will minimize the deficiency so the property can be sold before the home forecloses. Short sales are often done successfully within 30 days to 60 days that the mortgage payment became delinquent meaning the deficiency is less.

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