Welcome to the Asheville Short Sales Blog!

I’ve included a varied assortment of topics – everything from loan modifications to successful short sales.  Browse the categories or use the search box to read about judgment deficiencies, junior liens, and even attempts by homeowners’ associations to foreclose on homes.  If you have an idea for a blog article or a request for a specific topic, send me an email and I’ll make it the subject of the next article.

Time Running Out on Tax Forgiveness for Short Sales

One of the most important pieces of real estate and tax legislation is set to expire at the end of 2012.  The Mortgage Forgiveness Debt Relief Act has benefited countless borrowers who have sold their home in a short sale and had their debt “forgiven” by their lender.

For a brief explanation of how this works, here is a quick interview with Bob Massi, a well-known real estate attorney, author, and legal analyst:

Essentially, in a short sale, the goal is to have the seller’s lender “forgive” the deficiency (the amount of the loan not repaid).  This will result in the seller receiving a 1099-C for the given amount and would normally result in taxable “income” of that amount.  But this law provides for that 1099-C to be un-taxed (up to certain amounts).  This is a really big deal, because it means that a short sale has potentially huge benefits for a struggling borrower.  It motivates them to complete the short sale and avoid foreclosure.  This typically means a higher sale price, a lesser impact on the seller’s credit, and greater revenue for the lender. Read More »

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New Guidelines to Make Short Sale Approval Easier

For the 2nd time this year, Fannie Mae and Freddie Mac will issue more guidelines to make short sale approval easier for eligible borrowers.  Back in June, Fannie Mae issued guidelines to speed up the process, but these new guidelines (effective November 1st, 2012) are aimed at overcoming some of the obstacles that borrowers face throughout the process.

One of the major problems in the current short sale process is the amount of documentation required.  The new guidelines aim to reduce that burden by eliminating the requirement that borrowers document their hardship – if the borrower is 90 days or more in default and has a credit score of less than 620. Read More »

Posted in Fannie Mae & Freddie Mac, Foreclosure News, North Carolina Short Sale News, Short Sale Info for Realtors, Short Sale Info for Sellers | Comments closed

Short Sales Increase as Banks Realize Their Benefits

2012 is shaping up to be a big year for short sales, and it should come as no surprise.  Nationwide, short sales peaked in the first quarter of 2009 (105,000 short sale transactions nationwide), but preliminary data indicates that 2012 could come close to those same levels.

According to a report from RealtyTrac (A Building Wave of Short Sales), foreclosures typically outnumber short sales, but the gap is closing.  And in some states, short sales actually outnumbered foreclosure sales in January 2012.  RealtyTrac says this is likely because lenders are starting to opt for short sales as an alternative to maintaining and marketing foreclosures.

Additionally, the average price of short sales is declining, representing an increase in the average discount compared to non-distressed sales.

Source: RealtyTrac

Read More »

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NC Real Estate Commission Drafts New BPO Rules

As previously discussed on this site, NC Senate Bill 521 will grant real estate agents the right to perform a Broker Price Opinion for compensation even if there is no reasonable expectation of obtaining the listing.  Previously, to perform a BPO, the agent had to have some expectation of obtaining the listing or be licensed as an appraiser.

In order to comply with the new law, the North Carolina Real Estate Commission has drafted new rules to govern BPOs.  The rules will go to a final vote on September 5, 2012.

The rules establish minimum requirements that must be met when performing a BPO without the expectation of getting the listing.  Specifically, real estate brokers must: Read More »

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Asheville Realtors Offer Short Sale Workshop

Kudos to the Asheville Board of Realtors (along with the Haywood County and Hendersonville Board) for organizing a series of short sale seminars.  The seminars will be held Saturday, August 4 from 10am-Noon AND 1-3 pm at the Affordable Housing Fair and also from 9am – 2pm at First Baptist Church, 5 Oak Street, Asheville.

More details have been made available in the Asheville Board of Realtors’ press release, which is available on the Mountain Express website.

The seminar will help to explain the short sale process and will provide homeowners with information about foreclosure prevention.

According to the press release:

“The seminar introduces participants to local experts in the housing field. Whether a seller or buyer has questions about the short sale process, or a property owner wants information about foreclosure prevention, the program is designed to provide factual assistance, ” explained Corean Hamlin, program organizer.

If you can’t attend the seminar, you can still get the information you need.  If I can be of any assistance, please don’t hesitate to ask me any questions about these topics.  If I can’t help you, I probably know someone who can!

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Broker Price Opinion Bill Signed by Governor Bev Perdue

Official photo of Governor Beverly Pe...

Official photo of Governor Beverly Perdue (D-NC). (Photo credit: Wikipedia)

I’ve been writing about the potential law change regarding BPO’s in North Carolina for some time now.  And when Senate Bill 521 passed through the legislature, it was widely discussed online in other forums, blogs, and news media.  But the bill wasn’t yet a law, because the governor hadn’t signed it.  Well, all that changed on July 13, 2012, when Gov. Perdue signed 38 new bills into law.

But for some reason, I haven’t been able to find any other discussions of this online, except on the website of the Office of the Governor.  Oh well, it’s not media coverage that makes it a law anyway.

The new law actually goes into effect October 1st.  In the meantime the NC Real Estate Commission will continue moving forward with the “rule making process.”  I was told by the Commission said there would be some specific criteria regarding BPOs performed by Realtors.  Stay tuned…

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10 Reasons to Consider a Short Sale

The sale of a home or piece of property at a price below the amount needed to pay off your existing loan is known as a short sale.  It can offer a better solution than foreclosure.  Due to the housing crisis, many lenders are more lenient about accepting short sales than ever before.  This option isn’t for everyone; however there are times when it may be the best possible option. If you’re facing financial difficulty, here are ten reasons you may want to look into a short sale.

  1. It Could Save Your Credit Rating – While a short sale will most likely have an adverse effect on your credit rating, it isn’t likely to be as damaging as going through the foreclosure process. Speaking to a trained professional who has extensive experience in short sales can help you determine if this is the right option for you.
  2. To Avoid the Social Stigma of a Foreclosure – One of the most difficult parts of the foreclosure process for many fa Read More »
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NC Realtors Push for BPO Law Change

The North Carolina Association of Realtors (www.ncrealtors.org) has begun an email campaign to push for support of Senate Bill 521 – Broker Price Opinions. Below is the email that was just sent out by NCAR…

A major piece of legislation is under consideration in the North Carolina General Assembly and we need your help! Click here to take action.

Under current NC law, a real estate broker is prohibited from providing a client with a Broker Price Opinion (BPO) for fee unless the broker has a “reasonable expectation” of obtaining the listing on that property. North Carolina is currently one of only 5 states that restrict a real estate broker’s ability to perform Broker Price Opinions. SB 521 – Broker Price Opinions – would change that by allowing a broker to provide a BPO under limited circumstances. A BPO typically includes an inspection of the subject property, relevant neighborhood analysis, local and regional market information and trends, and a description of comparable properties and is prepared by a licensed real estate broker with intimate knowledge of their local market. BPOs provide critical information for decision-making and have been widely adopted as a tool in the mortgage industry due to their timeliness, cost effectiveness, and accuracy. Read More »

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Federal Disclosure Requirements to Protect Homeowners

By now, we’ve all heard of foreclosure rescue companies, loan modification services, and the like.  Many of these companies offer an invaluable service and are worth every penny they make in the process.  However, there are some groups out there who are either unknowingly charging illegal fees to underwater homeowners or who are complete and total scam artists.

The good news is the Federal Trade Commission has created the Mortgage Assistance Relief Services Rule (or MARS Rule) to protect homeowners from “unfair and deceptive practices.” Read More »

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What Every Seller Should Know About Cancellation of Debt in a Short Sale

The basic premise behind a short sale is that the seller will negotiate with their lender to sell the house for less than what is owed.  If the lender also agrees to “cancel” or “forgive” the short amount, then there may be a resulting tax liability for that amount.  According to a recent article on RISmedia.com by Linda Goold, tax counsel for the National Association of Realtors,

The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower.

taxes

Ok, so the sale is closed, the foreclosure process is stopped, and now the seller is stuck with a huge tax bill?  Well, not necessarily.  According to Goold, there are some exceptions.  For primary residences, the Mortgage Forgiveness Debt Relief Act of 2007 may come into play.  This law is set to expire at the end of 2012, but the National Association of Realtors is lobbying Congress to extend it.  But until then, what happens to the seller when mortgage debt is forgiven by the short sale lender?   Read More »

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