What Do You Need to Know About Workout Strategies?

First American - What Do You Need to Know About Workout Strategies?: "I. MODIFICATION AGREEMENTS I. Business Reasons for Modification of Loan Documents 1. Extend (or shorten) maturity date. 2. Capitalize delinquent interest. 3. Raise (or lower) interest rate. 4. Increase default rate. 5. Change or postpone payment dates, or amount of payment. 6. Permit assumption and release (or not release) borrower from liability. 7. Provide for additional principal disbursements. 8. Partially release property. 9. Require additional security for loan (additional property, personal guarantee of borrower or third parties, etc.). Note: The receipt of additional security by the lender for an antecedent debt may constitute a preferential transfer under sec. 547 of Bankruptcy Code if borrower files bankruptcy within 90 days thereafter. 10. When modifying mortgage, opportunity exists to correct or add other provisions, e.g., due-on-sale clause, cross default, guaranty, etc. II. General Legal Considerations 1. Modification Agreements are useful prior to acceleration of loan and foreclosure. 2. Obtain title search to determine if there are any other liens on the property. 3. Law is that, normally, priority of lien will be lost to extent that subordinate lienholders are prejudiced, or security is impaired, unless s"

Deeds in Lieu: Subsequent Foreclosure of Subordinate Mortgage

First American - Deeds in Lieu: Subsequent Foreclosure of Subordinate Mortgage: "Deeds in Lieu: Subsequent Foreclosure of Subordinate Mortgage Print this Page by John C. Murray © 2006. All rights reserved. Introduction Deeds in lieu of foreclosure are often heavily negotiated. However, in many instances the lender is actually doing the borrower a favor by agreeing to accept a deed-in-lieu. The lender rarely is actively seeking to acquire a property with a value less than the outstanding debt, which may require major repairs, renovation and rehabilitation. Lenders may even refuse to accept a deed-in-lieu, for reasons including environmental contamination, the belief that there is equity in the property, and excessive or monetarily significant subordinate liens. On the other hand, the lender may agree to accommodate a cooperative borrower by delaying the delivery of the conveyance to postpone the tax consequences to the borrower. There is certainly a benefit to taking title immediately and avoiding the foreclosure process, but this benefit inures to both the lender and the borrower. It is also costly to structure a deed-in-lieu transaction, and the lender will customarily bear virtually all of the transactional expenses, including title and recording costs, and environmental inspections. In any event, a deed in lieu of foreclosure does not “wipe out” any subordinate liens,"

You Can Avoid Foreclosure and Keep Your Home

You Can Avoid Foreclosure and Keep Your Home: "Steps to take when you can't pay your mortgage: - (Top) Contact your lender as soon as you have a problem Talk to a housing counselor Prioritize your debts Explore loan workout solutions with your lender If keeping your home is not an option Beware of predatory lending schemes 1. Contact your lender as soon as you have a problem - (Top) Many people avoid calling lenders about money troubles because we: o Feel embarrassed discussing money problems with others o Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt) But lenders want to help borrowers keep their homes because: o Foreclosure is expensive for lenders, mortgage insurers and investors o HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems Lenders have workout options (choices) to help you and: o These options work best when your loan is only one or two payments behind o The farther behind you are on your payments, the fewer options are"

Credit Repair: Scams

Credit Repair: Self Help May Be Best: "The Scam Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money. The Warning Signs If you decide to respond to a credit repair offer, look for these tell-tale signs of a scam: * companies that want you to pay for credit repair services before they provide any services. * companies that do not tell you your legal rights and what you can do for yourself for free. * companies that recommend that you not contact a credit reporting company directly. * companies that suggest that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number. * companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution. You could be cha"

Credit Repair: Self Help May Be Best

Credit Repair: Self Help May Be Best: "Credit Repair: Self Help May Be Best You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims: * “Credit problems? No problem!” * “We can erase your bad credit — 100% guaranteed.” * “Create a new credit identity — legally.” * “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!” Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report. This brochure explains how you can improve your creditworthiness and gives legitimate resources for low or no-cost he"

San Diego Foreclosure Attorney - tax liablity

Questions and Answers on Home Foreclosure and Debt Cancellation: "Step 2 – Figuring Gain from Foreclosure 4. Enter the fair market value of the property foreclosed.For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure. __$200,000__ 5. Enter your adjusted basis in the property.(Usually your purchase price plus the cost of any major improvements.) ___$170,000__ 6. Subtract line 5 from line 4.If less than zero, enter zero.___$30,000__"

for more information on loan forgiveness and short sales please see our blog on San Diego Short Sales http://san-diego-short-sales.blogspot.com/2007/11/short-sales-and-tax-liability.html

Questions and Answers on Home Foreclosure and Debt Cancellation

I was recently asked this question by a San Diego Realtor on behalf of San Diego Homeowner - for people with non recourse loans note what the IRS says about .75% of the way down.

Questions and Answers on Home Foreclosure and Debt Cancellation: "Can you provide examples? A borrower bought a home in August 2005 and lived in it until it was taken through foreclosure in September 2007. The original purchase price was $170,000, the home is worth $200,000 at foreclosure, and the mortgage debt canceled at foreclosure is $220,000. At the time of the foreclosure, the borrower is insolvent, with liabilities (mortgage, credit cards, car loans and other debts) totaling $250,000 and assets totaling $230,000. The borrower figures income from the foreclosure as follows: Use the following steps to compute the income to be reported from a foreclosure: Step 1 - Figuring Cancellation of Debt Income (Note: For non-recourse loans, skip this section. You have no income from cancellation of debt.) 1. Enter the total amount of the debt immediately prior to the foreclosure.___$220,000__ 2. Enter the fair market value of the property from Form 1099-C, box 7. ___$200,000__ 3. Subtract line 2 from line 1.If less than zero, enter zero.___$20,000__ The amount on line 3 will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions in question 2. Enter it on line 21, Other Income, of your Form 1040."