|
It’s sad to say, but there has been a lot of
foreclosures that didn’t have to happen. Approximately
80% of the foreclosures since 2008 occurred without the
homeowners ever trying to contact and/or otherwise
negotiate with the bank! Many of those outcomes were
due to a lack of knowledge combined with a great deal of
emotional distress. However, most of the past
foreclosures were avoidable and would not have happened
if the homeowners knew about the new laws and free help
that is available. One call to a knowledgeable Realtor
is all it takes to dramatically change the outcome from
foreclosure (and the negative consequences that follow)
to leaving the home with moving money and a fresh start!
The professional help is free and the legislation is
written… it just takes a phone call to get the process
started! In the meantime, here’s some of the more
noteable laws that were created to help people in
mortgage trouble:
Senate Bill 931 - A
short sale is a transaction in which the homeowner needs
to obtain permission from the lien holder to sell
because their home is worth less than is owed. Under
Senate Bill 931, the first lien holder must accept
whatever offer they approve as the full payment for the
outstanding loan balance. This prevented first lien
holders from pursuing borrowers for a deficiency
judgment (which is the amount lost on the loan), but
what about junior lien holders?
Senate Bill 458 -
Under SB931, junior lien holders were still able to
pursue borrows after a short sale, but not anymore. When
Governor Jerry Brown signed Senate Bill 458 (authored by
Senate Majority Leader Ellen Corbett), the protections
that were offered under SB931 were increased to cover
junior lien holders as well. The new law now prohibits
secondary lien holders from pursuing deficiencies after
a short sale closes.
Mortgage Debt Relief Act
of 2007 - Enacted on December 20th, 2007, this law
allows taxpayers to exclude income from the discharge of
debt on their principal residence. This means if you owe
$500,000 on a home your short sale for $300,000, you do
not have to pay tax on $200,000 of forgiven debt! The
provision covers up to $2 million of forgiven debt
during 2007 through 2012. However, the time is nearly
expired to take advantage of this law and while there
are rumors claiming they might extend this law, why
leave this much money to chance if it is in your best
interest to start the process now?
Home Affordable
Foreclosure Alternative Act (HAFA) - This law offers
eligible homeowners up to $3,000 for relocation costs.
As certified HAFA specialists, we can guide you through
the qualifying process and paperwork to get you the most
HAFA relief possible. |
