In our Ask the Expert Section, we recently received a question from Conrad, he asks, “I’m doing a short sale on my Knoxville home. I owe about $60K more on my Knoxville home than it is worth. I’m more than a year behind on payments and just started to get back on my feet. I’m afraid that my lender will pursue me for a deficiency judgment after completing my short sale is complete. Is there any chance my lender will waive their right to pursue me for a deficiency judgment?”
Every Knoxville short sale is a little bit different. There are many lenders that are willing to waive their right to pursue you for a deficiency judgment. In a majority of short sale we close, we are able to get a lender to waive this right.
A lender outlines how they will handle the debt owed in a short sale approval letter. In many cases, lenders will use terms like “forgiven” or “agrees to release the debt” in a short sale approval letter where they do not intend to pursue a homeowner for what is still owed on a Knoxville home. If you have questions over how the debt will be handled, I always suggest speaking with a trusted attorney for further clarification. Read the rest of this entry »
For Knoxville homeowners facing foreclosure, the expiration of the Mortgage Forgiveness Debt Relief Act was a major disappointment. On December 31, 2013, the Mortgage Relief Act expired, meaning that any Knoxville homeowner that does a short sale or that goes through foreclosure this year, will be required to pay taxes on any forgiven debt. So, is there still hope for the Mortgage Debt Relief Act to be extended?
Yes, there may still be some hope.
The Senate Finance Committee recently approved a tax package that would extend the Mortgage Debt Relief Act for another two years. The extension of the Act would mean that any homeowner that went through foreclosure this year or that did a Knoxville short sale would not be required to pay taxes on that income. The tax package also included an extension of tax deductions for mortgage insurance premiums and energy saving improvements on homes.
In order for the Mortgage Debt Relief Act to be extended, it must get the full approval of both the House and the Senate. With any luck, the Mortgage Debt Relief Act will hopefully be extended. Both sides of the political aisle have been in support of the Act, since it has helped countless homeowners since 2007. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Marshall, he asks, “I’m thinking about doing a short sale on my Knoxville home. I tried to complete a loan modification, but it was recently denied. I feel I have no other way to avoid foreclosure on my Knoxville home. I’m concerned though about the money all the money that I owe. What happens to the money that I still owe to my lender?”
In a Knoxville short sale, a home is sold “short” and a lender accepts less that is owed on a home, to avoid having to go through the costly foreclosure process. There are a few different ways that the remaining debt, or deficiency is handled. Here are a few possible outcomes.
One outcome that can occur is that the debt is forgiven all together. Contrary to what you may think, this is a common outcome in many Knoxville short sales. Obviously, this is the best outcome that a homeowner could ask for to walk away from the home completely debt free. Read the rest of this entry »
Knoxville homeowners who owe more on their home than it is worth are put in a very difficult situation. Oftentimes, the decision to short sale is not an easy one. Homeowners often wonder what the implications of a short sale will mean for their future, particularly on their credit score. If you’re considering doing a short sale on your Knoxville home, here is how a Knoxville short sale can affect your credit.
In order to avoid foreclosure, many Knoxville homeowners opt to do a short sale. A Knoxville short sale will do less damage to a homeowner’s credit than a foreclosure. In addition to a Knoxville short sale appearing on your credit score, late and missed payments will also do some damage to your credit score, along with any other delinquent accounts.
As far as how a Knoxville short sale will damage your credit, it depends how the short sale is reported to the credit bureaus. In many cases, lender will report the sale as “settled,” which shows that only part of the debt was repaid. In some cases, it is possible to get the lender to agree to report the debt as “paid,” which will do less damage to your credit. In some cases, if the short sale was reported incorrectly as a foreclosure, the damage can be much worse, which is why it is very important to see how it was reported after a Knoxville short sale. If it was reported incorrectly, there are steps that can be made to get it corrected. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Yvonne, she asks, “I haven’t made a mortgage payment on my Knoxville home in over a year. I’ve tried everything to make paying a my mortgage possible, including working 2 jobs. But, I have two kids and I can’t seem to make ends meet. I tried working with my lender but they’ve been a pain. I started a short sale but don’t want to let the world know about my situation. Should I be shamed of doing a short sale on my Knoxville home?”
In recent years, tough economic times have hit a lot of people very hard. While every situation is a little different, there are many people who have been hit by hardship and who have been in a very similar to you, which is why short sales have been so popular in recent years.
There is absolutely nothing to be ashamed of by opting to do a Knoxville short sale. The decision to complete a short sale is not an easy one. In many cases, prior to deciding to do a short sale, homeowners have already been put through the ringer by the lender. They may have tried to complete a modification or approach there lender for help, only to have to help for the efforts. After being put through all that, it can take a lot for homeowners to go ahead and pursue a short sale. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Claire, she asks, “My husband and I bought a luxury Knoxville home back when the market was hot in 2007. Our mortgage terms where a little exotic, and our interest rate eventually rose it a ridiculous rate. The interest rate combined with some other financial difficulties have made it very difficult to continue paying our mortgage on our Knoxville home. After meeting with a Realtor about selling our Knoxville home, we know that our home would not sell for what we owe and we’d still owe about $100K more on our how. If we do a short sale, how much of a loss will my bank be willing to take?”
With Knoxville short sales, there is no tried and true formula as to what banks will and won’t accept. If there were, short sales would be a much easier, predictable process. The good news is, though, lenders will be willing to consider a lot of different situations when it comes to short sales.
In my Knoxville short sale experience, I’ve seen many different scenarios where short sales have been approved. I’ve seen lenders approve short sales with a $20,000 loss and I’ve seen lenders accept a loss of $100,000. It really just all depends about the situation. If you are able to prove that you’ve gone through hardship and that paying your mortgage is no longer possible, you have a pretty solid chance at short sale approval. In addition, you’ll need to provide the proper data that your home could not sell for what you owe on it. An experienced Realtor will be able to help your provide the necessary data for this. Read the rest of this entry »
Over the past few years, Knoxville short sales have oftentimes gotten a bad name. In some cases, the complaints are justified, while in other the short sale troubles don’t stem from short sales themselves, but rather from the inexperienced parties involved. A Knoxville short sale agent can make or break a short sale outcome, which is why many inexperienced short sale agents have given them a bad name.
One common thing you hear from inexperienced Knoxville short sale agents is that they are impossible to complete. Obviously, this is not true since short sale closes all of the time. Short sales take a great deal of time and patience, which is why many agent dislike them. Unfortunately, hearing many agents talk about Knoxville short sale in this way making homeowners believe that short sales are impossible.
Another thing you’ll commonly hear from inexperienced Knoxville short sale agents is that the process is horrible and it takes forever. While the short sale process can be maddening, there are ways to make sure short sales move along a little quicker. In addition, it is important that short sales have consistent follow up to ensure their success. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Josh, he asks, “I started a short sale on my Knoxville home about 6 months ago. My Realtor thought we were getting close to approval when we received notice that my loan had been sold to another company. At that point, we had 6 months invested on the short sale, so the buyer decided to walk. My agent said we would have to begin the process all over again. I’m already a year behind on payments. With my loan being sold, is it too late for a short sale to be completed?”
One of the most frustrating aspects about completing a Knoxville short sale is the bureaucracy. Oftentimes, different departments don’t talk to one another, which is why sometimes servicing rights get transferred during a short sale. As irritating as it is, it can happen and unfortunately, there is nothing that can be done by the homeowner or the agent.
The good news is though you can still complete a Knoxville short sale. As irritating as it can be to start all over again, it is well worth the effort to avoid foreclosure on your Knoxville home. Even if the previous buyer walked away from the sale, short sales often have no trouble attracting buyers, so it should be an issue to find another one. Read the rest of this entry »
In a Knoxville short sale, a lender is willing to pay for a seller’s portion of closing costs, past due property taxes, and even real estate commissions. Unfortunately, there are certain things that lenders are not willing to cover in a short sale, like homeowner’s association dues [HOA dues]. If you’re doing a short sale on your Knoxville home, here is why it is important to keep current on your HOA dues.
If a homeowner doesn’t pay HOA dues, many homeowner’s associations have the right to put a lien against the property. This is is why it can be extremely important to stay current on your HOA dues if at all possible when doing a Knoxville short sale. In order to sell the property, all liens against the property must be paid in full at closing to give the buyer clear title. Unfortunately, in many cases, lenders are not willing to payoff HOA liens at closing, since they are already taking a loss on the property. Read the rest of this entry »
With any Knoxville short sale, time is of the essence. Foreclosure can happen in the state of Tennessee very quickly, which is why it is so important the homeowners start their short sale off right from the very beginning. Read on to find out more.
An experienced short sale agent can make all the difference when it comes to getting your short sale approved. An experienced agent will have the proper skills and experience to ensure your sale gets closed. When it comes to selecting a Knoxville short sale agent, it can be helpful to start with someone who carries a designation, like the Certified Distressed Property Expert [CDPE]. Interview a few agents and see who you feel comfortable. It is important to look into how many short sales they’ve closed and what their background experience is.
Step 2: Be Diligent About Getting Paperwork Together.
Once you’ve selected a Knoxville agent to assist you with your short sale, it is essential that you get him or her all of the paperwork they need. Many lenders will not even review a file until all of the paperwork is complete. Failing to do so can greatly delay or hurt your chances of short sale success. While it can be a pain to have to gather all of the paperwork and keep it updated, it is well worth it in the end. Read the rest of this entry »