By Sandy Flores
Help those with more than one mortgage loan
As “emergency action”, the Legislature passed SB 458 by state law, which was just signed by Governor Jerry Brown on 11 July and took effect immediately.
This law further extends the Anti-Deficiency Protection for homeowners who are facing foreclosure, which means a very big welcome relief for those homeowners who have a mortgage over and could not find an affordable outlet to avoid foreclosure. With risk and concern that banking institutions legally continue trying to collect the difference of the balance due, many of these extreme options as owners sought to access a lien, or in worst cases bankruptcy.
This benefit applies to owners who opt for a “short sale,” which is now one of the most convenient ways to avoid foreclosure and to prevent the banks going after the homeowner for the difference in the balance mortgage versus the sales value in the market today.
The “short sale”, known in English as “short sale” occurs when the balance you owe the bank is higher than the current value of the property on the market today, including all of the expenditure of sale. If you meet the requirements and your bank approved “short sale”, you are agreeing to accept less than the full balance of your debt. To find out if you have the necessary requirements and see if you qualify for a “short sale”, your bank will need your financial documentation to initiate and process the transaction.
The required documents are:
Federal taxes for the last two years.
The W-2 forms for the past two years.
Two months of your most recent bank account.
Pay stubs from your employer or check the most recent month.
Personal Statement: Include all your income and all expenses of home, in addition to all their financial obligations.
Letter of Explanation, known as “Hardship Letter”, which will detail the reasons why you can not continue payments. If this is the case it is very important that you read and fully understand the terms of the adoption of the “short sale” granted and issued by the bank as well as the expiry date thereof, and the costs are included in the approval for all amounts at closing match those required by the bank initially, and not be in trouble at the last minute.
Likewise sell your property in “short sale” gives you some control with self-monitoring of the sales process. You can meet the new owners on better terms.nMeet the requirements under the rules of Fannie Mae, to buy another home in two years instead of 5-7 years if your credit report does not reflect “repossession”. The committee published reports say the banking industry supported the new SB 458. The main benefit of this expansion law is that “no deficiency shall be owed or collected the bank” after approval a “short sale”. The exception to this law applies if the borrower commits fraud regarding the “short sale”. If your bank approved “short sale”, it has the right to issue a 1099 for the difference, due to a provision in the IRS code about debt forgiveness.
If you qualify for tax relief from the Internal Revenue Service, could exclude the payment of these taxes under the “Law of the Mortgage Forgiveness Debt”. Keep in mind that the short sale procedures are rather complex, so it would be advisable to be assisted by a real estate professional who is experienced with extensive knowledge in “short sales”.
The “short sale” is a process that takes time, so patience is recommended, but also perseverance. If you have made many attempts to get a loan modification, and not come to any reasonable agreement that suits you, or maybe the change is not the process that you want or is suitable for you, consider the “short sale” or “short sale “as a more prudent option, and thus avoid the foreclosure process, and / or in extreme cases bankruptcy.
See if you have more questions to a real estate professional, skilled and experienced in “short sales” so I can guide you and make this a more streamlined process confusing process. Time goes so fast! Take immediate action if you are going through this situation. Not only have less time to take action, but also less possibilities and solutions to work with them and avoid repossession of your property.