Are you a Sacramento Short Sale Seller or maybe you sold your home in a Short Sale over the past few years. Hope you read and checked the Short Sale approval from the bank.
Bank of America does not forgive the difference between what your mortgage balance was and the difference in what the house sold for. B of A puts a clause in their approval that states they reserve the right to come after the home seller for the difference.
Now, if in fact you as a Short Sale seller have a B of A mortgage, it ‘s important to know a few things. Is the mortgage a first or a first and a second that was original? There is a big difference if you refinanced your original loan. This is when you need to speak with your tax consultant. Whether or not it was your original loan or a refinanced loan with B of A, Bank of America will still put the clause in their approval but what it means to you will have a direct impact on whether or not it was your original loan or not.
As a Short Sale agent it is my job and my responsibility to make sure that the Short Sale Seller understands what the bank approval for their Short Sale says. I hope your agent explained your Short Sale approval and that you read what the bank stated. Some banks forgive the difference and others don’t so be careful.
Another subtle hint about Bank of America is the new system they have for sending the Short Sale documents called Equator. This is just merely a change in name for a system B of A had called Reotrans. This system is a web based driven program for bank owned, REO, foreclosed properties. Now, with the new name B of A can have the facade of Short Sale agents uploading all the Short Sale Seller’s documents to their system for ease when denying a Short Sale and beginning the process of foreclosure.
On the other hand, Wachovia has their act together and handles Short Sale superbly. Any agent dealing with a Wachovia Short Sale is on easy street compared to B of A. All the banks should take notice and direction from Wachovia when it comes to Short Sales.
Not all home sellers qualify for a Short Sale so it’s very important to hire a qualified Short Sale agent who specializes in Short Sales. It is always equally important to check with your Tax Consultant and a lawyer to determine if a Short Sale is right for you.
And everyone in California needs to understand that our state does not forgive the tax difference between what the bank got for your house and what you owed on your mortgage. Many Short Sale Sellers are and have been receiving a 1099 from their mortgage lender and find they owe taxes on that difference.
For a real eye opener be sure to read Years After Loan Default, Homeowners May Still Owe from RIS Media.
Do your homework and find out what is best for you before you decide to sell your house as a Short Sale.
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