Things you have to know about short sales.....

Short sale fraud. The increase in the number of short sales taking place is leading to a rise in incidents of short sale fraud. To learn how to avoid becoming a victim of short sale fraud, see Nolo's article Short Sale Fraud: Three Scams to Avoid.

The Wall Street Journal's Amy Hoak lays out a few new schemes fraudsters are just waiting for you to fall for:

http://online.wsj.com/article/SB10001424052970204358004577028341848990920.html?mod=WSJ_PersonalFinance_PF14

Make sure you have reputable Real Estate Broker on your side!
www.PRIMERealtyNC.com   252-637-7463

A short sale may be the answer to your mortgage problems. Here's what you need to know.

What yo need to know about Short Sales!
by PRIME Realty and Development LLC

Having trouble paying your mortgage? You may have heard that a short sale is the answer to your problems. A short sale is a sale of a property where the proceeds of the sale are less than the balance owed on the mortgage covering the property. A short sale may be right for many people, but is it the best option for you? Consider the following before deciding on a short sale of your home.

 
A Short Sales Won't Save Your Credit Score
Saving your credit score may be the most touted reason for choosing to short sale your home rather than letting it be sold at a foreclosure sale, but the reality is that a short sale is not much better for your credit score than a foreclosure. According to myFICO, the consumer division of Fair Isaac (the company that invented the FICO score), short sales, foreclosures, and deeds-in-lieu of foreclosure are all "not paid as agreed" accounts and are considered the same for purposes of your FICO score.

Short Sales Don't Always Cancel the Remaining Debt on the Mortgage

You may be surprised to learn that a short sale does not automatically cancel your obligation to pay off the remaining debt on your mortgage. There are two parts to your mortgage. The first part consists of your promise to repay the lender. The second part secures the loan, creating a lien on your property -- in other words, if you break your promise to repay, the lender has the right to have the property sold to pay off the loan.
So, when a lender approves a short sale, what is the lender agreeing to do? At the very least, the lender is agreeing to remove or release the lien on the property. A seller would have a near impossible task in selling a property without this lien release.
Is the lender also agreeing to cancel the seller's obligation to repay the loan in full? Not necessarily. Some lenders ask sellers to sign new, unsecured promissory notes before approving the short sale. Other lenders, without asking for new promissory notes, reserve their right to collect the deficiency -- the remaining balance of the debt -- within the fine print of their short sale approval documents (which you might not even see until the property sale is nearly due to close). After the short sale closes, the lenders start collections proceedings against the borrowers. Other lenders assign the debts to collection agencies, which then go after the sellers for repayment after the short sale closes. But in some states, first mortgages are non-recourse loans, meaning that you can't be sued for a mortgage deficiency after a short sale.

To be certain that you will not be on the hook to make any more mortgage payments after your short sale closes, ask your lender and get their answer in writing. If your lender refuses to give you a straight answer, contact an attorney to see if there are any state laws prohibiting your lender from collecting the deficiency -- and whether your lender has a history of complying with that law. (Some major lenders have been known to simply reinterpret the law in their own interests.)

You May Owe Taxes on the Deficiency

If your lender forgives you for a deficiency after a short sale, you may owe taxes on the forgiven amount. That's because it's considered income by the IRS, upon which you may owe federal and state income tax. Under the federal Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from your income all or a portion of the amount of forgiven debt in a short sale, but only if all of the following requirements are met:

• The forgiven debt was used to buy, build, or substantially improve your home or to refinance debt incurred for those purposes.
• The debt was forgiven between 2007 and 2012.
• The discharge was directly related to a decline in your home's value or your financial condition.

Short Sales: More Things to Think About

Still can't decide if a short sale is right for you? Here's some more food for thought.
You have other options. Short sales can take a long time and a lot of work, with no guarantee that they will close in the end. Before embarking on a short sale, you may want to contact your lender about other foreclosure alternatives, such as refinancing your mortgage, modifying your loan, or negotiating the terms of a deed-in-lieu of foreclosure. Like short sales, each of these other options has its own set of drawbacks and benefits to consider before proceeding.
Is time on your side? Make sure you have enough time to sell your home. As mentioned above, short sales can take a long time, usually months, to close. Will you have enough time to market the property, find a buyer, and negotiate with your lender for approval before your house is foreclosed on? Short sale negotiations with your lender, or even your lender's approval of a short sale, will not automatically stop that lender's foreclosure process. Contact your lender and the trustee managing the foreclosure process about postponing any scheduled foreclosure sale to give your short sale enough time to close. The flip side of the time question is that, while most short sales take months to close, yours may be the exception and close quickly. Like any home sale, once the short sale closes, you will have to move. If your primary goal is to stay in your home for as long as possible, letting the home be sold at a foreclosure sale may be a better option for you.

You'll need approval before you close. Is there a second loan on your home? Is your mortgage covered by insurance? Do other creditors hold liens on your property? You most likely will need the approval of all parties with an interest in your property to close the short sale. This is bad news because the time and effort needed to close a short sale increases exponentially with each additional interested party. In this situation, you should identify all parties with an interest in your property and contact them early in the short sale process

We would love to help sell your home, give us a call and let us tell you about all the great services we have to offer 252-637-7463Info@Primerealtync.com

New Bern NC Short Sales

What is a short sale? When the owner of a property owes more on the mortgage than the property is worth and can't make up the difference, the mortgage holder must agree to take less than is owed in order for the owner to sell the property. This is called a short sale. If foreclosure proceedings have already been started but not yet completed, a short sale can also be a pre-foreclosure. That means it is not yet owned by the bank, but the foreclosure process has been started. Who actually makes the decision to approve a short sale? Sellers are not allowed to profit in any way from a short sale transaction. So the seller really don’t care what he/she sells the home for. Surprisingly enough, the seller's lender, who is probably only servicing the loan, doesn’t care either. The servicing bank merely collects the appropriate documents and presents the entire file to the investor who is actually holding the note and is owed the money. So the investor is the only one who cares how much the sales price is. And each note has a different investor. Literally, you could have two identical homes with two identical cash offers being serviced by the same bank, and yet one will get approved and the other will not. It is entirely up to the investor holding the note how much, if any, loss they are willing to take. Why do short sales normally take such a long time? Servicing banks (like Bank of America, Wells Fargo, Chase, etc.) make money by collecting monthly payments on mortgages notes on behalf of the note investor. As soon as the borrower stops paying on the note, the servicing bank stops making money. The bank then has little monetary incentive to hire a large number of employees or install the necessary infrastructure (computers, faxes, etc.) necessary to complete thousands of complicated files. Often minimum wage employees will quit in the middle of a file, so the next person hired has to start all over again. On top of that, once a file is finally completed, it must be presented to the note holder. If the note holder is a large institution like a major insurance company, it can take a long while to sign off on a substantial loss. It can literally take three to four months to get any sort of an answer back on from the bank on a short sale. Why do most short sales fail? Most short sales fail simply because of the time it takes to find out from the bank if they are approved. Even the most serious buyer can become fidgety after a month or two (or more) of waiting to hear something, anything. That is why it is crucial for the seller's agent to give weekly updates to the buyer’s agent, even if there is nothing new to report. Just a steady stream of communication can keep a deal alive. The second most common reason short sales fail is the difference in appraisal values between the short sale bank and the buyer’s lender. Again, a strong listing agent can go a long way toward documenting reasons for a lower sales price, though again this is ultimately the decision of the investor and sometimes those decisions seem to make no sense at all! But it is quite common to see the same property go into escrow several times before a successful closing. There is nothing wrong with the property itself, just the process. That is why it is vital that the seller, the buyer and the agents all remain calm and be willing to jump through many hoops to a successful close. Guaranteed, there will be many hoops!  :)  But the patient buyer can get a great deal and the seller can walk away with a clean slate, and that is what makes it all worthwhile for both parties. Use this link to see Short sales currently listed for sale in New Bern North Carolina http://www.easternncmls.com/new/maildoc/babis_1329494636-Feb-17-2012-11_03_56am.html And as always if you have any questions or if there is anything else we could help you with give us a call 252-637-7463 or email us at Info@PRIMERealtyNC.com We are here to help you get the BETS possible deal!