God news for those of you who own 2 homes and are selling 1 of them. If you moved to a new home recently and have a vacant home that is listed for sale, there may be some relief for you in the near future. Governor Granholm signed a bill recently that allows for homeowners in this situation to claim 2 homestead exemptions instead of the normal 1.
House Bill 4215, now Public Act 96 of 2008 sponsored by Representative Ed Gaffney (R-Grosse Pointe Farms) enacts that the seller can retain an additional exemption for up to three years on property previously exempt as the owner’s principal residence if the following circumstances are met:
the property is not occupied,
the property is for sale
the property is not leased or available for lease
the property is not used for any business or commercial purpose
Monday, April 21, 2008
Friday, April 11, 2008
Top 10 Seller Short Sale Questions..Answered
Most Common Questions A Seller Will Ask You
Number 10
I can't make my house payments, but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score...is a short sale right for me?
Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder), it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.
Number 9
If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
The mortgage insurance is not there for your protection, just the mortgage lender's.
Number 8
Do I have to have my home "Approved" by the lender prior to offering it for sale as a short sale?
No. Technically speaking there is no such thing as being "Short Sale Approved." The actual approval only happens with an accepted offer.
Number 7
I just missed a payment and I know I will miss more...how long does the foreclosure process take and is there time to do a short sale?
The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In California its taking 6+ months. Generally speaking a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.
Number 6
Will I still have to pay property taxes if I do a short sale?
Property taxes will always have to be paid as part of any accepted short sale. Whether it's you or the lender, it depends on their policies and the specific agreement you reach while negotiating the short sale.
Number 5
I owe more than my home is worth and I can't make the payment. Do I have to somehow qualify for a short sale?
The simple answer is NO. If someone can't make their payment and they are otherwise insolvent, they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.
Number 4
Do I have to pay income taxes...I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me...the seller...is this true?
It WAS true, now it's not. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due.
Number 3
How do you, my listing agent get paid...who pays your commission?
The bank will pay the commission along with all the other usual closing costs.
Number 2
Do I have to miss a payment to do a Short Sale?
No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.
Number 1
I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holders.
Number 10
I can't make my house payments, but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score...is a short sale right for me?
Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder), it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.
Number 9
If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
The mortgage insurance is not there for your protection, just the mortgage lender's.
Number 8
Do I have to have my home "Approved" by the lender prior to offering it for sale as a short sale?
No. Technically speaking there is no such thing as being "Short Sale Approved." The actual approval only happens with an accepted offer.
Number 7
I just missed a payment and I know I will miss more...how long does the foreclosure process take and is there time to do a short sale?
The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In California its taking 6+ months. Generally speaking a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.
Number 6
Will I still have to pay property taxes if I do a short sale?
Property taxes will always have to be paid as part of any accepted short sale. Whether it's you or the lender, it depends on their policies and the specific agreement you reach while negotiating the short sale.
Number 5
I owe more than my home is worth and I can't make the payment. Do I have to somehow qualify for a short sale?
The simple answer is NO. If someone can't make their payment and they are otherwise insolvent, they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.
Number 4
Do I have to pay income taxes...I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me...the seller...is this true?
It WAS true, now it's not. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due.
Number 3
How do you, my listing agent get paid...who pays your commission?
The bank will pay the commission along with all the other usual closing costs.
Number 2
Do I have to miss a payment to do a Short Sale?
No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.
Number 1
I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holders.
Thursday, April 3, 2008
Governor Granholm Signs "Save The Dream" Legislation
Legislation is aimed to help local residents facing foreclosure
Surrounded by local lawmakers in a Jackson bank, Gov. Jennifer Granholm gleefully signed into law Wednesday a bill to help struggling homeowners avoid mortgage foreclosure.
The "Save the Dream" legislation, effective immediately, creates two refinancing options for some homeowners through the Michigan Housing and Development Authority. The package is designed to diminish the number of mortgage foreclosures sweeping the state.
Granholm made the presentation and signed Senate Bill 950, one of six bills in the package, in the lobby of Citizens Bank, 1712 E. Michigan Ave. She also made stops in Grand Rapids and Detroit.
Last year, Jackson County had a record 1,227 foreclosures, and it already has more than 200 this year.
"Jackson has been hard-hit by the struggling auto industry and the slowness of the economy," Granholm said. "We just want to provide people with help where they need it most."
The tools allow homeowners struggling with rising adjustable-rate mortgages or homeowners who have fallen behind on mortgage payments and are at risk of losing their homes to get a lower, 30-year fixed-rate loan.
To qualify for the programs, household income must be less than $108,000 and the home's purchase price cannot exceed $224,000.
The programs will be paid for by taxable bonds. Home-owners will be responsible for the full value of their refinanced mortgages.
Sens. Mark Schauer, D-Battle Creek, and Randy Richardville, R-Monroe, helped push the package through the Legislature and on Wednesday escorted the governor into the lobby. They represent portions of Jackson County.
"When people lose their homes in Michigan, they are Democrats, they are Republicans, it doesn't matter," Granholm said. "It's about Michigan. This is pro-Michigan legislation."
Richardville said the foreclosure crisis is the toughest issue facing Michigan households. Schauer said the problem "is devastating families, neighborhoods and communities across the state."
Schauer decried the thought that homeowners in trouble made their bed and should lie in it.
"That kind of thinking ignores the fact that this crisis affects all of us and that some homeowners were taken advantage of through no fault of their own," he said. "This will directly benefit the community."
Surrounded by local lawmakers in a Jackson bank, Gov. Jennifer Granholm gleefully signed into law Wednesday a bill to help struggling homeowners avoid mortgage foreclosure.
The "Save the Dream" legislation, effective immediately, creates two refinancing options for some homeowners through the Michigan Housing and Development Authority. The package is designed to diminish the number of mortgage foreclosures sweeping the state.
Granholm made the presentation and signed Senate Bill 950, one of six bills in the package, in the lobby of Citizens Bank, 1712 E. Michigan Ave. She also made stops in Grand Rapids and Detroit.
Last year, Jackson County had a record 1,227 foreclosures, and it already has more than 200 this year.
"Jackson has been hard-hit by the struggling auto industry and the slowness of the economy," Granholm said. "We just want to provide people with help where they need it most."
The tools allow homeowners struggling with rising adjustable-rate mortgages or homeowners who have fallen behind on mortgage payments and are at risk of losing their homes to get a lower, 30-year fixed-rate loan.
To qualify for the programs, household income must be less than $108,000 and the home's purchase price cannot exceed $224,000.
The programs will be paid for by taxable bonds. Home-owners will be responsible for the full value of their refinanced mortgages.
Sens. Mark Schauer, D-Battle Creek, and Randy Richardville, R-Monroe, helped push the package through the Legislature and on Wednesday escorted the governor into the lobby. They represent portions of Jackson County.
"When people lose their homes in Michigan, they are Democrats, they are Republicans, it doesn't matter," Granholm said. "It's about Michigan. This is pro-Michigan legislation."
Richardville said the foreclosure crisis is the toughest issue facing Michigan households. Schauer said the problem "is devastating families, neighborhoods and communities across the state."
Schauer decried the thought that homeowners in trouble made their bed and should lie in it.
"That kind of thinking ignores the fact that this crisis affects all of us and that some homeowners were taken advantage of through no fault of their own," he said. "This will directly benefit the community."
Subscribe to:
Posts (Atom)
