Short Sale Blog

Short Sales in Colorado can take a few weeks or several months to complete depending on the lenders that you have your loans with.

Recently guidelines have been changed that require the lenders to respond to a short sale offer in 30-60 days.   The banks will get 60 days if they are required to do an appraisal on the property, which happens on almost every short sale.   This would represent a substantial time reduction for many lenders.

Will all  short sale offers be responded to in 60 days or less?    It’s hard to tell, but short sale time frames for many banks have been coming down over the past few months.    The faster the bank responds to an offer the better chance you have of completing your short sale successfully.

Short Sale Colorado specializes in performing short sales for homeowners that are facing foreclosure.   Contact us today!

In many instances you will receive a 1099 as a result of short sales in Colorado.  The reason you receive a 1099 is your lenders loss is considered your gain and can possibly be taxable income.

In many cases you will owe no taxes as a result of the short sale.   The Mortgage Forgiveness Debt Relief Act of 2007 will protect homeowners from tax consequences through 2012, as long at the property is your primary residence and you still have the original loans on the property.  Check to see if you are covered under this act.

There may be many other ways you can eliminate, or minimize and tax liability after a short sale on your property.   I recommend that you speak to a CPA or tax accountant to see what tax liability you have if you do a short sale on your property.  I also recommend that you have a CPA or tax accountant prepare your taxes the following year after a short sale.

Don’t let yourself be caught off guard.   Make sure you understand if you have any possible tax liability after a short sale.  No one likes surprises down the road, especially if they are negative.

Many short sales in Colorado are put at risk due to buyers lenders not being prepared to close on time.   Nothing is more frustrating than having to go back to the short sale lender and get extensions because the lender couldn’t provide the final loan numbers on time.   This creates a lot of work and in some cases the lender won’t give the extension.

Why is this such a problem?  In many cases I think some lenders work at their own pace and don’t assume that an extension will be granted if they don’t perform on time.  In other cases I’m sure that the buyers don’t get information required by the lender in a timely manner.

The majority of short sale lenders require that the final HUD settlement statement be submitted for final approval 48-72 hours before closing.   I can’ t tell you how many times we get the final number from the lender a day before closing and are expected to get the banks approval regardless of the banks requirements.

Agents need to stay on top of lenders to make sure that they are getting the final loan numbers submitted in time to get the final approval for the short sale. 

Don’t let the buyer’s lender put your short sale at risk.   Short Sale Colorado specializes in performing short sale for homeowners facing foreclosure.  Contact us at www.shortsalecolorado.com.

Bankruptcy may be a solution for your financial situation, but does not stop foreclosure in Colorado.   Bankruptcy can delay your foreclosure, but doesn’t resolve the your foreclosure.   Your lender will still be required to complete the foreclosure process after your bankruptcy is discharged in order to take your property back?

What can a bankruptcy do to help my foreclosure?   There are a couple of things that a bankruptcy may do to help you in the foreclosure process.   First, a bankruptcy can buy you more time to stay in your house while you attempt to do a short sale.  Second, a bankruptcy may eliminate any deficiency that you owe to the lender as a result of a short sale or foreclosure.

Many homeowners avoid bankruptcy entirely by performing short sales on their properties.   If you are considering bankruptcy contact an attorney that also understands the foreclosure laws thoroughly.   

Many

The HAFA Program has helped many home owners avoid foreclosure in recent months.  There are two major advantages to a HAFA short sale.  

1. First you will not be responsible for the deficiency which is the difference between what you owe on the property and the net amount of the sale of your property.   The is a major advantage over traditional short sales.
2. You will also receive $3,000 in relocation expenses at the closing of your property. 

If you have a conventional loan and are facing foreclosure you should see if you qualify for the HAFA program.   Short Sale Colorado has processed many successful  HAFA short sales. 

  I would appreciate any feedback you have regarding the HAFA Program.

Yes… you can make money on short sales in Colorado, but only on certain types of short sales.   There are programs available to certain homeowners that allow them to make money on a short sale of their property, but first the homeowner must qualify. 

What does it take to qualify?   In most cases you must live in the property to qualify, but there are some exceptions.  The two main programs that pay homeowners in a short sale are the HUD-FHA Pre-Foreclosure Program and the HAFA (Home Affordable Foreclosure Alternative Program).  

The HUD-FHA program allows people who have an existing FHA loan on their house to qualify for the program.  The program will pay $1000 to the homeowner on a successful short sale.   The homeowner is generally required to live in the property, but can still qualify for the program if they haven’t rented their property for more than 18 months.

The HAFA program allows people with conventional loans to qualify for the program.   This program will pay the homeowner $3000 for a successful sale.   The homeowner is required to live in the property to qualify for the program, or have specific reasons for not living in the property.   Not all banks participate in the HAFA program, and not everyone that is reviewed for the program will be accepted. 

There are certain banks that will also pay homeowners an incentive to short sell their property. 

How do I know if I qualify?   Ultimately you will have to meet the qualifications of the various programs, but it is always worth pursuing these programs when you can.  Contact Short Sale Colorado to learn more at www.shortsalecolorado.com.

Short Sales In Colorado can take several weeks or months to complete.  The sooner you get started on your short sale will give you a much better chance of completing the sale successfully.    

Some banks will not even allow a short sale to be processed if the property is within 30 days of the auction date.   The best time to start a shorts sale is when you first determine that you can no longer afford your property.  In most cases banks will allow you to start a short sale even if you are still current on payments. 

Contact Short Sale Colorado to get information regarding your situation at www.shortsalecolorado.com.   We specialize in helping homeowners avoid foreclosure.

Flagstar is one of the worst banks to perform short sales in Colorado.    If you have Flagstar as your lender and are facing foreclosure you need to get started as soon as possible.   Flagstar makes processing short sales as difficult as possible.  The more time you have the better chance you have of avoiding foreclosure.  

We have processed many Flagstar short sales and they continue to be very difficult.   Flagstar will require the homeowner to continually supply updated documents every month as the short sale progresses.  Even after an offer is submitted on the property they take forever to respond. 

As a homeowner be prepared to provide documents as quickly as possible in order to keep the process moving forward.   Also, the sooner you  get started will greatly increase your chances of a successful short sale.

Short Sale Colorado specializes in working short sales for homeowners facing foreclosure.   Our services are no cost to the homeowner.   Contact us at www.shortsalecolorado.com.

Home Affordable Modification Program may allow homeowners to modify their existing loans and possibly keep their properties.  Be aware that the majority of modified loans fail within the first year.  Make sure that a modified loan will work for you long-term, or you may just be putting more money into a property that you will never recover.

Short Sale Colorado help homeowners avoid foreclosure by performing short sales on their properties.

I would appreciate any feedback on your experiences with the HAMP program.

Wells Fargo has recently become much more difficult processing short sales in Colorado.   In recent months Wells fargo short sale process has slowed to a snails pace and they continually request documents time and time again. 

I’m not sure why Wells Fargo’s process has become so inefficient, but it is costing many homeowners to go to foreclosure.   Many buyers will not wait the excessive time that Wells Fargo takes to review a short sale offer.  

If you are working a Wells Fargo short sale make sure that the buyer understands how the time frame to expect for a response.   It’s possible to have successful short sales with Wells Fargo, but it’s definitely getting tougher.

Wells Fargo used to be one of the better banks to work with on short sales.  It is unfortunate that their process has become so ineffective.