According to a New York University School of Law report (Time Magazine – 10/24/09), in 2008 as many as 86% of foreclosure victims did not have legal counsel. Distressed homeowners have difficult choices to make about what to do if the equity in their home has evaporated. There are many potential solutions. The one thing they have in common is that real estate brokers are not qualified to advise homeowners on which one is best.As of November 19, 2009, there are 2,322 single family homes in King County being advertised by real estate brokers as “short sales”, which means the expected proceeds of the sale will not be enough to pay off the mortgage(s) and the seller does not have the resources to make up the difference, which means the home can’t be sold without the approval of the lender(s).
- How many of those homeowners sought legal or tax advice before deciding to list their property?
- How many of them understand that the bank’s approval of a short sale does not mean the bank is forgiving the loan?
- How many of them know that seeking approval of a short sale is similar to applying for a loan, and that the lender will consider all of the homeowner’s assets before deciding whether to approve a short sale?
- How many of them understand that real estate agents are not licensed to negotiate debt forgiveness?
- For those homeowners who are fortunate enough to negotiate the forgiveness of some of their debt, how many know that the amount forgiven will probably be subject to federal income tax?
- How many of them considered other options such as coming to the closing table with enough cash to avoid a short sale, foreclosure, bankruptcy, or trying to hang on to the house until the market recovers?
- How many of them understand how each of these options would affect their credit ratings?
No comments:
Post a Comment