THE PROSPECT
LAS VEGAS GROUP
UPSIDE DOWN HOME
VALUES?
OPTIONS, QUESTIONS & FACTS
Valentino Crespo Jr.
Prudential Americana Realtors
Phone#: 702-526-6998
Email: Prospect2LasVegas@Gmail.com
5 Locations to Choose From!
Henderson: 871 Coronado Center Dr.
South West: 8337 W. Sunset Rd. #150
Summerlin: 10777 W. Twain Ave. #333
West Side: 7475 W. Sahara Ave. #100
NorthWest: 7495 Azure Dr. #120
THE PROSPECT
LAS VEGAS GROUP
DO’S AND DONT’S
Do not deed your property to someone else
without confirmation of the payoff of the existing loan(s). If you relinquish
control of the property to someone else that does not make the payments,
your credit will be ruined even if you do not still own the property. The
lender made the loan to you!
Do Investigate several resources. There are
very few choices that can really get results! I provide a FREE
CONSULTATION. We handle hundreds of clients with similar
circumstances. We’ll take a closer look at which option may be best for
you.
Do not become immobilized. Doing nothing will not help
resolve the problem. Never ignore the lenders phone calls or letters.
Failure to communicate says you don’t care!
THE PROSPECT
LAS VEGAS GROUP
What Options are New?
STATE PROGRAM: Foreclosure Mediation
*STOP THE FORECLOSURE PROCESS!!! This is the best
opportunity to FORCE YOUR LENDER TO SHOW UP AT MEDIATION. This
is an opportunity to make your Lender comply with loan terms favorable
to you in front of a Mediator!! Foreclosure Mediation specific to Nevada provides
you THE best chance of protection and action Vs. your Lender!!
*Keep in mind the 70% of primary home owners who do not qualify for Loan
Modification, are more likely to get Pre-Approved terms for Short Sale including, FULL
forgiveness of debt AND to get a release of the Lender to pursue a
deficiency judgment in the future.
*The Loan Mediation process has specific qualification terms and time
frame limits. Contact your Realtor to learn more about taking
Advantage!!
USEFUL WEB LINK:
Programs for Foreclosure Mediation by State
www.NevadaJuciciary.us
FEDERAL PROGRAMS: H.A.M.P & H.A.F.A
The government has rolled out two programs to nationally address the housing crisis,
Home Affordable Mortgage Program addresses loan modifications for
Primary Home Owners that qualify. For those who do qualify for HAMP, and
still financially cannot afford their home, the Home Affordable Foreclosure
Alternative program will provide an opportunity for participating
Lenders to approve short sales while releasing deficiency amounts. For
more information on both programs go to:
WEBSITE: www.Making HomeAffordable.Gov
THE PROSPECT
LAS VEGAS GROUP
How does the Mortgage Forgiveness Debt
Relief Act of 2007 help me?
Prior to the passage of this law, for any debt that was forgiven in a Short
Sale or a Foreclosure the home owner would receive a 1099 and would have
to report this forgive (or cancelled) debt as income. This still holds true for
those individuals who do not qualify. From January 1, 2007 to
January 1, 2012, the act eliminates the phantom tax on debt
cancellation in mortgage discharge with Short Sale.
Debt must have been incurred to acquire a principle residence.
Cancelled debt up to $2 million is eligible
Sets forth rules for determining the allowable amount of exclusion
for tax payers with non-qualifying indebtedness and taxpayers who
are insolvent.
Debt from a second (non acquisition) mortgage or HELOC may not
eligible
Cancelled debt from investment properties and second homes may
not be eligible
USEFULL WEB LINK:
The Mortgage Forgiveness Debt Relief Act of 2007
http://www.irs.gov/individuals/article/0,,id=179414,00.html
*UNDER CURRENT LAW, AFTER 1/1/12 DEBT WILL NO
LONGER BE FORGIVEN!
THE PROSPECT
LAS VEGAS GROUP
What are Conditions Forgiveness of Debt?
Primary Home Owner
Medical condition or serious injury
Job relocation when the property lacks equity for the current market
Job loss or significant reduction of income
Divorce or split of domestic partners
Mortgage payment adjustments beyond borrowers capability
What Exactly is a Short Sale?
A Short Sale is the sale of a home when the sales proceeds do not fully pay off the
existing loan(s) and the costs associated with the sale of the property. This is done to
avoid the serious long term damages and Financial Penalties of
Foreclosure or Bankruptcy.
Why would I do a Short Sale?
BECAUSE MANY TIMES….IT’S THE BEST OPTION!!
Debt still owed on the deficiency of a loan AND the Banks costs incurred to
Foreclose can actually carry on with the owner for years.
*Under the 2007 Debt Forgiveness Act…a short sale can actually forgive
the debt so that does not happen. In addition Short Sale Credit damage
can be limited to 24 to 36 months!
The bottom line is Foreclosure leaves much more severe financial damage.
*Debt settlement is completely based on each individual’s financial
position.
USEFULL WEB LINK:
Home Foreclosure and Debt Cancellation
http://www.irs.gov/newsroom/article/0,,id=174034,00.html
THE PROSPECT
LAS VEGAS GROUP
What about Tax Consequences?
If you don’t qualify for the above exclusions, the IRS defines the amount you are “Short”
as having been cancelled. It is also required for the lender that allows this debt
cancellation to issue you a 1099 for this amount and you are required to claim this
amount as income.
If a property is foreclosed on, this is also debt cancellation and the default amount can
also be treated the same way. In most cases the amount of default with a
foreclosure will be MUCH greater than with a short sale, and on
properties with more than one loan the debt will carry on for years! This is
one of many reasons for avoiding a foreclosure at all costs!
Will there be a Deficiency Judgment?
In some cases, Lenders also pursue a deficiency judgment against borrowers and
attempt to collect the amount that was short. This does require a separate action to be
filed in court causing the mortgage company to incur further expense.
The mortgage company is very aware of your inability to pay and often
sees further collection attempts as fruitless.
A Short Sales approval under the Debt Forgiveness Act will provide the
best opportunity for the Lender NOT pursuing a deficiency judgement.
How will Short Sale Affect my Credit?
The big key here is to AVOID FORECLOSURE!! Short Sales will affect your credit
rating especially if you miss your mortgage payments during the process. But, by nearly
any measure, a foreclosure is the most damaging event your credit status
can encounter!! WEBSITE: http://www.housinghelpnow.org/
THE PROSPECT
LAS VEGAS GROUP
HOW WE CAN HELP
I provide a Free Consultation that specifically meets your needs so
we can accurately assess the best options for you.
You’ll get the most up to date information from Attorney’s and
C.P.A’s leading the field in results.
As a Certified Professional, I will increase your chances for
financial security and protection.
I use a team of professionals ensure you have Thorough options,
service and information on What’s Best for YOU!!
Recommended Professionals
Attorney Troy Atkinson
Foreclosure Mediation and Short Sale specialist
Phone: 702-562-6000
Email: tatkinson@atkinsonwatkins.com
*Free Consultation when referred by Paul Campanaro
Black and Lobello Law
Foreclosure Mediation and Short Sale specialist
Phone: 702-869-8801
Website: www.BlackLobelloLaw.com
C.P.A’s
Michael S. Mathews Phone: 702-240-5237
Mark Sherman Phone: 702-645-6318
THE PROSPECT
LAS VEGAS GROUP
Foreclosure vs. Short Sale
Homeowner Consequences
Issue Foreclosure Successful Short Sale
Future Fannie Mae A homeowner who loses a home A homeowner who successfully negotiates
Loan-Primary to foreclosure is ineligible for a and closes a short sale will be eligible for a
Fannie Mae mortgage for a Fannie Mae mortgage after only 2 years.
Residence period of 5 years.
Future Fannie Mae Investor who allows a property An investor who successfully negotiates
Loan Non-Primary to foreclose is ineligible for a and closes a short sale will be eligible for a
Fannie Mae investment Fannie Mae backed mortgage after only 2
mortgage for a period of 7 years. years.
Future Loan with Answering “Yes” to ANY type of There is no similar declaration or question
ANY Mortgage Co. foreclosure within the last 7 regarding short sale.
years, on Question C in Section
VIII of a standard 1003 form,
will severely affect rates
Score may be lowered anywhere Only late payments on mortgage will
Credit Score from 250 to 300 points. show. Depending on how the short sale is
Typically affecting credit for 3 reported closed will affect a credit score as
years little as 50 points if all other payments are
being made. Short Sale effect is as brief as
18-24 months.
Foreclosure will remain as a A short sale is not reported on a credit
Credit History public record permanently, and history. There is no specific reporting
on a person’s credit history for item for short sale.
10 years or more.
Any position requiring security On its own, a short sale does not challenge
Security Clearance clearance in a profession will most security clearances.
almost certainly lead to a
revoked clearance and/or
termination of position
Current Employers may check credit of A short sale is not reported on a credit
Employment employees. In some cases report and is therefore not a challenge to
foreclosure is reason for future employment.
reassignment or termination
Future Many employers do require A short sale is not reported on a credit
Employment credit checks on applicants. In report and is therefore not a challenge to
most cases a foreclosure will future employment.
challenge employment
Deficiency In 100% of Foreclosures in With most banks, it is possible to
Judgment Nevada, the bank has the right to convince the lender to give up the right to
pursue the deficiency judgment. pursue the deficiency.