A real estate property short sale is in most circumstances a most difficult transaction to handle. Signing away ownership your precious real property investment is a painful decision to make in whatever way you will look at it. It leads to a whole lot of other problems which include damaged credit standing, embarrassment and the loss of dignity of an owner being stripped of ownership to his home.

A growing part of the real estate sales in recent times are short sales. This is an indication that this option can be your best route if handled properly. A short sale is possible when the lender agrees to accept less than the due amount from the mortgage. Short sale is basically a discounted payoff which shall be resorted to by the lender in lieu of foreclosure. However, one should remember that not all real estate properties can qualify under a short sale setup.

On the other hand, if you are seriously considering a short sale for a property, it is important that you know of several drawbacks that are associated to such type of real estate transaction.

Here are the important things that you must do if you are going to pursue a short sale of a real property:

1. Retain the services of a legal counsel – The short sale involves a lot of legal issues and it is essential that you are provided with relevant advice by a competent lawyer with the expertise in such short sales transactions.

2. Hire an accountant to learn the tax implications – Before you proceed with the short sale transaction, it is essential that you consult with a CPA with regards to the ramifications of the short sale on tax exemptions under applicable tax laws and guidelines.

3. Coordinate with the Mortgage Lender – Expect to have a regular and close contact with the mortgage lender when you finally decide to make a go for the short sale. It is essential that you coordinate with the person who has the authority to make decisions regarding the short sale transaction.

4. Present a Letter of Authorization to the Lender – In order to facilitate the short sale transaction, it is important for you to present a letter of authorization to the lender. This authorization shall allow the lender to coordinate with relevant parties about your loan.

5. Obtain Preliminary Net Sheet – This is the financial schedule that describes the circumstances behind your financial difficulties. It contains all the pertinent information like the cost of the sale, outstanding loan balance, late fees and charges and other related fees associated to the sale.

If you are able to hurdle all the requisites, then you should expect an approval of the short sale by the mortgage lender. During the negotiation phase, don’t forget to request the mortgage lender not to submit an adverse credit feedback to credit reporting companies.

For more information please visit: http://www.floridalawattorney.com

Obama’s Loan Modification Plan is supposed to help homeowners to afford their monthly mortgage payments by refinancing the current mortgages or by having their loans modified in some way. This plan would include help for homeowners who are not currently in default but are in some ways at risk of failing behind in their mortgages payments or are at risk of default.

Unfortunately the vast majority of the funds will go to the banks and lenders with the objective of incentive them to participate in this program, but they will not be forced to comply.

Very important as well, Obama’s Loan Modification Plan will fight to amend the law to help homeowners with could not afford, even new modified mortgage payments to get help under a new possible bankruptcy law.

Obama’s Loan Modification Plan is a voluntary program for the banks and lenders. It includes big incentives for mortgage servicers and investors, both of whom have been seen as unwilling to work with homeowners facing foreclosure to modifying loans.

These funds will try to subsidize rates and insurance companies with falling home prices, and millions more will be used to modified loans of those homeowners who already are in default in their mortgage payments. The plan would help homeowners who owe more than 80% of the value of their homes to refinance and reduce their monthly mortgage payments. Banks and servicers normally won’t refinance loans to people who have less than 20% equity in their houses.

At this moment, only those who are current on their payments and whose loans are held or guaranteed by Fannie Mae and Freddie Mac are eligible for the Obama’s Loan Modification Plan. This only, is leaving millions of homeowners facing foreclosure out of the scope.

The new refinanced mortgage, including refinancing costs and expenses, can not exceed 105 of the current value of the home, excluding many of the hardest places hit. So if your loan is $210,000, your home can not be worth less than $200,000 in order to be considered for the plan, this is one of the reason thousands if not millions of borrowers are being rejected.

Obama’s Loan Modification Plan, which started March 4, allows borrowers to refinance into 15-year or 30-year fixed-rate mortgages at the current market rate, which lingers around 5% at this moment, this intent to help homeowners loan that carries higher rates and those whose rates could be increased in the future because of the adjustable mortgage rate that they signed on. The loan balance, however, will not reduce.

Obama’s Loan Modification Plan would reduce interest rates so that the monthly obligation is no more than 38% of a homeowner’s income and then the government would kick in money to bring payments down to 31% of the borrower’s income.

The initial objective of the plan is to bring monthly mortgage payments to 31% or less of the homeowner’s income. Only loans where the cost of the foreclosure would be higher than the cost of modification would qualify, and this, unfortunately, is determine by each Lender.

Obama’s Loan Modification Plan also addresses some borrowers who need extra help because they are carrying so much debt on top of their mortgages. Those with total debt equal to 55% of their monthly income must enter a debt counseling program to qualify for a modification.

Part of the Obama’s Loan Modification Plan is that it does not powerfully address the fact that over 14 million homeowners are stuck in mortgage loans that have balances that are higher than the value of their homes. These homeowners will not qualify for the plan.

If a family has a setback, like unemployment, reduced household income or illness, will not be consider for this modification plan. For properties that have not equity, default and foreclosure may be impossible to avoid. Similarly, if the family has a big expense for a new roof or new plumbing, etc., it would not make sense to put more money into a home in which they have no equity. In those cases Obama’s Loan Modification Plan will not be a solution for the homeowner.

Fortunately, there are still ways you can stay in your property for a very long time, often more than two years, even if you were rejected into the Obama’s Loan Modification Plan or if you think you will not qualify at this time because of the many requirements necessary to be considered for the program. Even if you lost your job, or have not income whatsoever, you still can stay in your home, but you need to know what to do and how to proceed in order to achieve this.

You do not have to lose your home just because you did not qualify into any of the government Loan Modification or refinance program, you still have many options, but just sit in your home and wait for foreclosure will not do it, you need to act and you need to act fast.

People that file bankruptcy are usually under a lot of pressure. Making the decision to file and getting through the process can be particularly stressful when you don’t understand what is going on. This is usually do the terms being used by the lawyer. With this article, I hope to put much of that to rest for you.

Discharge

Discharge is usually a bad term in every possible setting, but not in bankruptcy. You want a discharge more than anything when you file bankruptcy. Why? It means your bankruptcy is at an end and many, if not all, of your debts have been washed away. Discharge represents the proverbial “finish line” for your case.

Dischargeable Debt

You get to write off all your debts when you file bankruptcy, right? No. Only dischargeable debts get discounted or written off. Non-dischargeable debts survive the bankruptcy and you have to pay them in full. Some examples of non-dischargeable debts include income taxes and student loans. The extent to which a particular discharge debt can be written off depends on the type of bankruptcy you are filing and the nature of the debt.

Exempt Property

When you file bankruptcy, your creditors are paid through the liquidation of some or all of your assets. The bankruptcy code, however, contains language that creates certain types of exempt property. This property cannot be used to satisfy debts owed to creditors. Put another way – you get to keep it! The classic example of exempt property is the “homestead exemption”. In some states you get to keep part of the value of your home. In Florida, you often get to keep the entire home and live in it despite the fact you’ve gone belly up.

Fraudulent Transfer

This is a term you need to understand and avoid like the plague. A fraudulent transfer is the movement of any asset by a debtor for the purpose of protecting it from creditors. Bankruptcy is set up to give you a fresh start, but you have to be honest and up front with the court. If you drop off all your jewelry at your sister’s house and don’t list it as an asset in your bankruptcy filing, you are guilty of fraudulent transfers. Your bankruptcy filing will be terminated at a minimum. In a worst case scenario, you’ll go to jail. In short, it isn’t worth risking.

For more information please visit: http://www.floridalawattorney.com