Posts in Foreclosure Alternatives

Recently, sellers who were seeking approval for their Freddie Mac Short Sale were informed by their loan servicing company that the investor (Freddie Mac) has made an important policy change.  Effective immediately, Freddie Mac will no longer approve short sales of properties in the redemption period.

In Minnesota, the redemption period is the 6 month time frame following the Sheriff's Sale.  This change is being made, in part, because the official ownership of the property changes when the Sheriff's Sale occurs.There are options to help you deal with these new changes, but don't delay.  Call me at my Google Voice number 925-272-8363 or email me at pakaper@ExitRealtyNexus.com for more information.

Use this link to see if Freddie Mac owns your mortgage: https://ww3.freddiemac.com/corporate/

Here is the most recent update from Chris Galler at the Minnesota Association of REALTORS®:

The Federal Mortgage Forgiveness Debt Relief and Debt Cancellation Act was enacted in 2007 to help struggling homeowners by allowing qualified applicants to exclude the discharged debt from their income taxes after a short sale of their primary residence.  This law automatically sunsets at the end of this year.Without this law, many homeowners who have been through a short sale will end up paying incomes taxes on the discharged debt.  For example, if a homeowner had a $200,000 mortgage and completed a short sale for $125,000 – the lender/services issues a 1099 for $75,000 and the homeowner is then responsible for the incomes taxes on that $75,000.To put this into perspective, there is a long standing Capital Gains Exemption for profits made from the sale of a primary residence.  The first $250,000 per individual (or $500,000 per married couple) is automatically exempt from federal income taxes.

It seems horribly unfair to tax homeowners with a real hardship for their loss while at the very same time giving an exemption to homeowners who make a profit on the sale of their primary residence.  Talk about kicking someone when there are down!

Why haven’t you heard about this before?  Because there are those

Here is an article by a respected source about the "Deed In Lieu" option as an alternative to foreclosure.  The biggest problem that my clients have had with this option is the fact that the lender may still seek a Deficiency Judgement against them...  Make sure to weight the advantages and the disadvantages when considering this option.

Facing foreclosure and you just want it over with? The deed in lieu of foreclosure may be your best alternative. Here are the advantages, disadvantages and tips on obtaining a deed in lieu.

If you're facing foreclosure and you just want closure, call your lender and tell them you want a deed in lieu of foreclosure agreement. If you and your lender come to terms, your mortgage loan is canceled in exchange for the deed to your house, making the lender the new owner. And it can happen in a fraction of the time that it takes to do a short sale.

The deed in lieu of foreclosure: The government smoothes the way

Thank your government, or more specifically, the Home Affordable Foreclosure Alternatives Program https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html (HAFA), for making this foreclosure alternative more enticing. The program is part of the larger Making Home Affordable program. Th