SoCal Realty – Real Estate Services For The 21st Century
A Short Sale Is Not The Only Option
There Are Alternatives
Many people today are facing some very tough choices regarding their financial well being. Trying to keep a job, keeping food on the table, and in many cases trying to keep a roof over their heads. The past two years have been very troubling for many of us.
As a Realtor I come in contact with many people who are in extremely stressful financial situations. Many are facing the real possibility of losing their home. Whether it’s from loss of income or declines in property values, or many who have adjustable mortgages that will soon adjust resulting in much higher monthly payments. Today many homeowners are seriously delinquent on their home loans and not sure what to do or where to turn.
Well I’m here to tell you that we have options. A Short Sale or Foreclosure is not the only option available. I get really upset when I see real estate ads from agents claiming that “a short sale is the answer”, or I do short sales with no tax consequences. Really no tax consequences huh? Most real estate agents are not CPA’s so knowledge of the latest tax laws can be minimal at best. Get the facts first and make an educated decision on what you need to do if you are in a home and are behind or in danger of becoming behind on your payments.
Here is what we recommend. This is not rocket science just common sense.
- First and foremost, stay in touch with your lender. If you’re delinquent don’t ignore letters or telephone calls. If you’re in danger of getting behind on your payments contact your lender immediately. Ignoring lender’s communications will solve nothing.
- In California the foreclosure process starts with the Notice of Default (NOD). If you receive a Notice of Default, the clock is running. The borrower has up to 90 days to correct the situation. After the 90 day period, the lender can file a Notice of Trustee Sale. This notice must be published in the local newspaper or like media for 21 days. After 21 days a foreclosure sale can take place. You have less than 4 months to correct a default on your home.
- We’ve all heard of Loan Modifications. That’s where you attempt to work out a payment solution with your lender. Some people have received loan modifications many or most have not. Check with your lender on their loan modification program if they have one. Be prepared to provide the lender a Hardship Letter explaining the circumstances of your financial situation. Paystubs or P&L if you’re self employed and bank statements too. Many want copies of previous year’s taxes as well.
- Through recent legislation Programs like HAMP (Home Affordable Modification Program) or HAFA (Home Affordable Foreclosure Alternatives) were created. Both programs were created by the US Treasury Department. The success of the programs is debatable but they are there and should be explored. Speak with your lender about these programs.
So now you’ve contacted your lender and they have either denied you a Loan Modification or they have not responded, what can you do? Here’s what:
What we have done here at Southern California Realty Associates is partner with the best of the best in the Tax and Legal professions. While we here at SoCal Realty can handle any real estate service you need we are not qualified to provide Tax or Legal advice. Any Realtor you work with should advise you to seek the appropriate legal or tax advice from qualified experts in these fields.
If you need legal advice on your situation when your lender will not work with you or you have been served a Notice of Default or a pre notice of default demand letter please feel free to contact us and we will do our best to assist you. Remember, you should never pay any upfront fees for loan modification services regardless of who you’re working with. It is against the law for anyone who does this type of work to be paid in advance of services rendered.
Knowing the tax laws involved with any short sale or foreclosure is extremely important. We recommend always contacting a reputable CPA firm to get the information you need.
In closing, I hope this brief outline has helped to clear up some common misconceptions about the Short Sale and Foreclosure processes. The bottom line is you do have choices on how you proceed. Please feel free call me on 909-636-2759 or email me at jritoli@verizon.net. If I can answer any questions or to refer you to the appropriate experts in their fields.
Jack Ritoli
Jack Ritoli
Broker
Southern California Realty Associates
DRE License: 01701260
About Jack Ritoli
