The
number of foreclosures today is unprecedented today. Millions of houses in the
U.S. are in some stage of foreclosure. However, if more homeowners were to get
the right information in their hands faster, before their foreclosure date,
many of these foreclosures could be avoided - or at least their losses from
foreclosure could be significantly reduced.
Foreclosure affects a
homeowner in multiple ways - from a financial, legal, tax, credit, and personal
standpoint - and you must address them all to best protect yourself and avoid
the most loss.
The top five things you must do when you first realize
you're in danger of foreclosure are summarized from a new eBook called, "How to
Survive Foreclosure - or Avoid it Altogether."
This new resource includes the best foreclosure-related advice
from top-notch experts to help homeowners know what to do during and after
foreclosure.
The experts include real estate and bankruptcy
attorneys, CPAs who use sophisticated tax strategies, senior mortgage
consultants, financial and credit specialists, one of the top short sale
companies in the U.S., and a licensed professional counselor.
Their
advice:
1. Pinpoint the reason you're now facing foreclosure
in the first place. If you are experiencing a temporary setback, your options
to foreclosure will be different than if you know you definitely can't make
your mortgage payments now or in the future.
2. If you know you cannot afford to keep your loan,
determine when it makes sense to stop making payments. The sooner you
conclude that you cannot catch up or consistently make payments, the less money
you will give up in trying to save a situation that cannot be turned around.
Don't make the mistake of draining all of your life savings, retirement and
other funds to hold onto a loan when you know your situation will not change
and allow you to get back on track with your mortgage payments.
4. If you must give up your house, determine if your house is in a
judicial or non-judicial foreclosure state. Knowing what legal
rights you and your lender have is critical when trying to negotiate with
your lender to avoid foreclosure.
If you've received a Lis Pendens from your lender, you are in a
judicial foreclosure state and your lender has filed a lawsuit against you for
the foreclosure and the deficiency. If you've received a Notice of Default from
your lender, your house is in a non-judicial state and your lender has not
filed a foreclosure lawsuit against you. A list of state-by-state-guidelines is
spelled out simply in the eBook.
However, even if your house
is in a non-judicial state, your lender has the right to sue you for the
deficiency after a foreclosure or short sale; but there are many
variables that determine whether or not they will actually take this course
of action.
5. Above all, don't just walk away from your house and
let it foreclose. You'll bring on even more problems that could cost you
much more than just your house. Try to at least short sale your house to cut
your losses in credit and tax. Short sale is when your lender forgives
the difference in what you owe on your loan and what a buyer is willing to
offer for your house. Ideally, the lender will accept the short sale offer and
write off the deficiency as cancelled debt on a 1099-C tax form. (See
other alternatives in the eBook).
A short sell is a much
better solution for both you and your lender. For you, the credit implications
are much less than if you have a foreclosure on your record. Short sale is a
"bruising" of your credit for one to three years; and less if you use a good
credit repair company. Foreclosure can stay on you record for almost 10 years;
although it can be less if you take steps to repair your credit and use a good
credit repair company. (See How to Rebuild Your Credit inside the eBook).
For your lender, there is less debt they must write off as a loss and
the house is sold so the lender does not have to repossess the house; causing
even more cost for them.
For those who live in the
house, the Mortgage Debt Forgiveness Act excuses you from having to pay
taxes on up to two million of debt that your lender cancels in a short sale or
foreclosure. However, the Mortgage Debt Forgiveness Act does not apply to those
who don't occupy the house, such as investors. To avoid paying taxes on
cancelled debt if you're an investor, you'll have to prove insolvency. (See Tax
Implications inside the eBook).
About the Author:
Elin Bullmann, the author, has experienced foreclosure first-hand as
well as successfully avoiding other foreclosures - but only with the help of
experts she worked with for almost two years to gather the best information on
what to do.
Because Elin couldn't find a resource that had all the
information she gained from these experts, she captured it for others to use in
this first-of-its-kind eBook called, "How to Survive Foreclosure or Avoid it
Altogether." |
