Topic of Discussion: Foreclosures:/ Strategic Defaults
Josh discussed 4 Basic Options available:
1) Foreclosure 2) Short Sale 3) Deed in Lieu 4) Loan Modification
Foreclosure – lender gets property back and can’t go after homeowner for the deficiency (non-recourse) on 1st mortgage. The 2nd mortgage lender can still sue for the deficiency
Short-Sale – Lender agrees to accept an offer even though it’s less than what’s owed on the property. The 2nd mortgage lender also has to agree to release their lien. (often for as little as $3,000) but they can still sue the borrower for the deficiency. The short sale gives you an opportunity to negotiate with the 2nd mortgage lender to completely settle the debt for less than the full amount.
Deed In Lieu of Foreclosure – only appropriate when you only have one loan. Basically expedites the foreclosure process. Borrower is released from liability. Also appropriate for condos where there is a special assessment. The mortgage debt forgiveness release act allows an exemption for forgiven debt. Normally, taxes are due on the debt that is forgiven. The law is only in effect until the end of this year.
Credit Score: will be affected by 100-130 points with a Short Sale and 150 points by a foreclosure.
Target Market: Real Estate Agents, New families, growing families, anyone who purchased a home in 2005 – 2007, condo owners, Seniors & investors.
Questions: People starting a business,” How do I get out of my underwater mortgage?”, “I need a will”,
For more information contact:
Joshua G. R. Curtis, Attorney
LUKE, CASTEEL & OLSEN, PSC
Attorneys at Law
Alderwood Business Center
3400 188th Street SW, Suite 484
Lynnwood, WA 98037
425 744 0411 (phone)
425 771 3490 (fax)