Questions and Answers

The below questions were answer by our inhouse attorney.

Is buying a bank owned property (REO) from Bank of Amercia a good option?
Buying bank owned property can get you a lower price but that lower price comes with risk. The bank, since they never lived in the house, does not have to disclose the problems with the house like a normal homeowner would have to. I would suggest that you get a thorough home and pest inspection. Remember also that the bank will not negotiate the price with some rare exceptions.

Walk away from mortgage pros and cons?
Never just walk away. Always attempt a Short Sale first. Short Sales are much less damaging to your credit and don’t cost you anything. You most times can squeeze out more “free” rent as well. If you do nothing a foreclosure will result and that will stay on your credit report for a long time causing you problems long after the dust settles. You will not be able to easily rent another place and it will be extremely difficult to buy another place for 5-7 years. Many people say “I don’t care – just let it go” but I would strongly urge them to consider a short sale.

Can we short sale if we owe more than the house is worth?
That is the definition of a short sale. Selling your house for less than what you owe. The sale begins as a normal sale and becomes a “short sale” when the offer a buyer is willing to pay is less than what is owed. Then your bank has to “approve” the sale since they will be getting a haircut. It gets a little more confusing when second mortgages are involved. Feel free to call us for a free consultation should you have any questions.

Down side of walk away on my home?
The downside is that you will end up in foreclosure and that is a mark on your credit that will last a long time. It will be difficult to rent and you cannot buy another house for 5-7 years. Some employers are pulling credit reports as well. Rates for things like auto insurance can be effected too. A short sale is almost always a better approach and doesn’t cost you anything.

I need financial help i’m upside down on real estate property Sacramento?
Quite often there isn’t much you can do with an upside down mortgage. The Obama plan isn’t working the way they had planned. Depending on how “upsidedown” you are you might consider a short sale and get on a 2-3 year plan to buying another house. We can analyze your situation by giving you a free consultation in which we explain all your legal options.

Do you offer free short sale attorney advice?
We absolutely offer a free attorney consultation. Short sale isn’t the only option available to people with upsidedown mortgages. Sometimes bankruptcy makes sense and sometimes  a loan modification might be the best option. What we offer is the opportunity for you to have your complete situation analyzed by an attorney who is a distressed property expert.

Is strategic default a good option for California owners?
There are many definitions of what a “strategic default” is. Most short sale situations require a hardship. A hardship for a short sale is not the same as the qualifications for a loan modification so you can be turned down for a modification (because you make too much money for example) yet still qualify for a short sale. Everyone’s situation is different so we would really need to discuss your situation in detail to fully answer this question.

Can a lawyer in Sacramento help me with strategic default?
Yes we can help you. We give you the legal advice you need so that you are educated every step of the way. We are licensed in California and can help people anywhere in the state.

Tax consequences of foreclosure in upside down property?
This can be a very complicated question. Everybody’s situation is different but the quick short answer is that you have until the end of 2012 to get a tax break if the property is your primary residence.  There are ways to get tax preference even if the property you are losing is an investment property but it depends on your specific situation. We can explain the law and review your specific situation during your free consultation.

When should you default on upside down house?
Most people decide to stop making their payments after they have given up hope on keeping their home. The loan modification process can wear people out and even if you can get one of the rare modifications it may not be what you really want. If you are extremely upside down in a market that is still going down it might not even make sense to pursue a loan modification. Once you have made the decision that you are not going to keep the house then it makes very little sense to keep making the payments. I do suggest that you pay any Home Owners Association dues and also keep your insurance payment current while you continue to live in the house whether you choose to do a short sale or just let it go in foreclosure.