Danielle Groeneweg

There have never been more positive signs of late that the market is finally picking back up. In Lynden locally, we have seen a total of 18 pendings in just the last 15 days (and that is single family residences only)! Many of these recent pendings are brand new constructions, so if you are out looking for one you better be ready to move on it ? Also, just in the last month, there have been 19 sold SFR’s in Lynden. Interest rates are still record low, and buyers are being brilliant and taking advantage! There’s never a better time to buy or sell than right now in the late Spring, early Summer. This is very good news for our economy!

If you are currently in the process of short selling your home or your home is going to be foreclosed but you are trying to put off as long as possible, there is some very important info you need to know:

There is currently a Mortgage Forgiveness Debt Relief Act of 2007 that Bush started and was extended. As of right now however, it EXPIRES 12/31/12 unless our gov’t renews. What does this mean for you?

Currently the act protects those who sold their home under duress or had their home foreclosed from them from having to pay taxes on the forgiven debt (ie the shorted amount when sold via short sale or the amount still owed bank when foreclosed). Without this Act, the forgiven debt can be counted as taxable income for the year the short sale or foreclosure occured.

As of 1/1/2013, that will be the case if this Act is not renewed. Your National Association of Realtors is working hard to get it renewed, but it may not happen. Just beware that if your short sale or foreclosure does not occur by 12/31/2012, you may be liable for taxes on the forgiven debt amount.

For more info visit

http://www.irs.gov/individuals/article/0,,id=179414,00.html

Many home owners today do not know about the Foreclosure Fairness Act of 2011. It took effect in August and applies accordingly:

~Only for owner-occupied residences

~Guarantees homeowners the right to a face to face (or phone to phone) meeting with their lender – the person representing their lender must have authority to make binding decisions

~In order to take advantage of this FFA, homeowner must respond to a letter from their mortgage lender called a ‘Notice of Pre-Foreclosure Options’ or NOPFO.

~If home owner does not respond before a deadline, teh homeowner LOSES the right to meet w/lender.

~Home owner should be assigned Housing Counselor who helps prepare for meeting w/lender. If home owner responds within 30 days of date of NOPFO letter, the foreclosure process is delayed another 60 days to allow negotiation.

Said negotiation can include approval of short sale or allowance to attempt short sale. This means that if homeowner is fearful they are too close to foreclosure to do a short sale, this may help give more time.

For more information about this very important act, please visit

http://www.commerce.wa.gov/site/1367/default.aspx

2) Short Sale Alternative Info cont’d

i)
Foreclosure
timeline

(1)
Warning
letter => Notice of Default (30 days) => Notice of Sale (30 days) =>
Trustees Sale (90 days) => Borrower must vacate (20 days)

ii) Agricultural land must be Judicial FC

(1)
Under any Judicial FC, seller has 1 year to buy back their
home/property at the amount the buyer paid for it at the auction + nominal
interest

(2)
Buyer beware – if buying a Judicially
FC’d property, wait at least 1 year before making any improvements

iii) Bankruptcy

(1)
If
borrower has numerous other unsecured debts

(2)
Large
second mortgage with ongoing liability after SS or FC

(3)
Tax
debts or other competing complications

(4) Advise
client to talk to a lawyer => if they refuse, have sign acknowledgment that
you advised atty

Please remember to read the first 3 Short Sale Tidbit blog entries for more information. As always, if you have any questions about short sales and need some expert advise, please contact Danielle anytime at 360.483.6490 or via email dgroeneweg@muljatgroupnorth.com!

The market is heating up right now due to smart investors and those who want to take advantage of the amazing interest rates that may not be around much longer. Take a look at our local stats below from the month of Dec to Jan. Some areas are doing better than others, but for the market to be this busy during the slower time of the year – something is happening. Stay tuned for updates on changes from Jan to Feb – we are sure to see an even more significant increase in sales and pendings. There is light at the end of the tunnel.

As always, if you would like more information or a FREE Current Market Analysis for your home please call me (Danielle) anytime 360.483.6490

i) General Short Sale Difficulties

(a) If <1 lien holder, SS can be at least 4 times harder

(i) PMI counts as lien holder – must ok the SS (only servicer can get ok from PMI)

(b) If auction is within couple weeks, SS very difficult (maybe impossible)

1) Short Sale Alternative Info

i) Deed in Lieu (just give house back to bank)

(1) Only available if seller has just 1 lien on house

(a) Lender will step into position of seller, so does not want any other liens to now be held accountable for

(2) Results in no deficiency (same as non-judicial FC)

(a) Entire balance owed on FC lien is gone

(b) Junior liens not discharged if proceeds can’t pay (from re-sale of home)