By Chris B Johnson Realtor, Ventura County, Moorpark CA – The Stop Foreclosure Institute recently received a question from Tom about short sales. Here was Tom’s Question.“My Ex-wife decided to Short Sell our former house. Unfortunately we both signed the mortgage when we bought the house together. I think that means I am still liable for the debt.
She got the home after the divorce. The court gave her the home in the divorce. The market has declined and the house is worth about 120k less than the mortgage amount.
I have a good job and some assets. Will I have to pay back the bank off the money they lose. (My ex is selling because of financial problems.)
Also, someone said I might have to pay income taxes on the written off debt. Is that true? Please help me out here. Sincerely, Tom.”
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Here was our answer. Tom, you probably should talk to a good lawyer. This is not the standard short sale. There might be tax laws that will allow you to not be liable for the tax liability on the written off debt.
In my opinion, the Tax Law allows you to write off most of the forgiven debt on a short sale. Usually you have to short sell the house before the end of 2015 and have lived there for 2 of the last 5 years, but the law is different in California.
Your ex probably meets that criterion. I would think that since she lives in the house, then you wouldn’t be liable for the taxes. But, then again, I am not an accountant and don’t know how the law would affect such a unique situation.
Will you have a deficiency judgment? We can’t know for sure because there are so many variables involved. However, in about 80% to 90% of the time, you won’t have a deficiency.
That is because most lenders just forgive the debt. They have found it tough to collect the upside down debt. Most people are short selling because of financial problems.
They are struggling to avoid bankruptcy without a large deficiency judgment. When they see a $100,000 deficiency, then they will probably just declare bankruptcy. Then the lenders gets nothing anyways.
Check with a competent short sale realtor in your area. They will be able to give you a good idea of whether or not you will have to pay the deficiency. Thinking about a short sale?
I can help you short sale your property and get back on your feet. Send me an e-mail at cjohnson@prucalhomes.com.
I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 805-208-0823
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Moorpark loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this,
Chris B Johnson.
.Chris B Johnson is a Realtor with Prudential California Realty, Berkshire Hathaway HomeServices
Phone: 805-208-0823.
cjohnson@prucalhomes.com.
Certified HAFA Specialist, Certified Short Sale Negotiator
View My homes for sale at www.ChrisBJohnsonRealtor.com.
Chris B Johnson specializes in loan modification assistance and short sales in Ventura County California. Ventura County Loan Modification Help, Ventura County short sales. Ventura County Short Sale Realtor Moorpark CA Short Sales. Moorpark Realtor.
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Important Notice
Chris B Johnson,Prudential California Realty, Berkshire Hathaway HomeServices , and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are Chris B Johnson’s personal views and do not reflect the views of Prudential California Realty, Berkshire Hathaway HomeServices .
This information on Moorpark Short Sales: My Ex Is Short Selling. What Can I Do? is provided as a courtesy to our viewers to help them make informed decisions. Always check with a good real estate attorney to find out the laws in your state. There are also legal aid non profits that can give you advice on what to do to stop a garnishment or bank account seizure. You should also look at California SB458. With the passage of SB458, the Expanded Anti-Deficiency Law May Have Unintended Consequences on Ventura County Short Sales.
For Disclosure, and more information on Mortgage Assistance Relief Services, please see Code 16 of Federal Regulations (FTC), Part 322, or , http://www.ftc.gov/opa/2010/11/mars.shtm and always consult your CPA, Accountant, Financial Advisor and Attorney before you any financial or legal decisions. Certified Distressed Property Expert.
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