Since there are so many homes going into foreclosure and many others already bank owned, the savvy home buyer has a very real likely hood of finding out that their perfect home is in foreclosure, or is a short sale. Here is what you absolutely MUST know before you start thinking of putting in an offer on a short sale property.

First of all, be aware that to get an accepted offer could take any where from four to six months. Your real estate agent, the listing agent and the seller have no control over how long the bank takes to accept or reject your offer.

The reason that this part of the process takes so long is that usually there isn’t a local person involved. Most likely, the offer is being review by people getting paid minimum wage hundreds, if not thousands of miles away. They have never seen the home you want to buy, and they really don’t have any reason to hurry. They get off work at five, and they’ll be back to work on Monday. This is actually one of the reasons that we have such a foreclosure mess, banks operate in their own time frame and bank employees have no incentive to get you in your home.

Secondly, be prepared to pay your own closing costs in addition to what ever money you are putting down. By definition, a short sale means that the bank is already coming up “short” in other words there isn’t enough money to pay off the sellers loan. The bank is already taking a loss and typically they won’t want to pay your closing costs on top of what they are already losing.

Third, Don’t get your heart set on any home until you have the key in hand and are moving in. Don’t burn any bridges like screwing over your landlord thinking you’ll be moving next week. Short sales are notorious for having last minute delays and extensions for no understandable reasons. It is also common for a sale to fall through at the last minute because of mysterious bank red tape. Let closing on your home be an unexpected, pleasant surprise.

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The Chase loan modification program is offered by JP Morgan Chase Bank, which is JP Morgan Chase & Company. They work through 24 Chase Mortgage Centers. This program, which was announced on December 31, 2008, gives person-to-person help for those not only with Chase Bank loans, but also Bear Stearns and Washington Mutual, who they acquired… Chase calls themselves “the largest bank by market value.”

Of course, you can’t just walk in and they’ll touch you with a wand and all your troubles will be over. This is work. It is hard work for those who are not used to working with forms and finances. Just the fact you can meet face-to-face with a loan officer says a lot during these troubled times. Not everyone would agree with that. Some consider help as “you do everything for me.” Welcome to the real world. Chase plans to help 400,000 homeowners with 170 billion dollars in loans. Yes, that is a “b” in front of that word.

They also offer a web site so you can do everything on-line. It is at chase.com. You then need to go to “keeping-your-home.” The site is easy to navigate and offers forms in the .pdf format. It begins with a 16 items checklist of what you need. It even has Form 4506-T, Request for Transcript of Tax Return, with instructions. That’s Section 1. Section 2 is the three page financial information form. It requires borrower, property, loan and employment information. Also required is your bankruptcy status. Next is your monthly income and expenses, along with a list of your assets. Section 3 is your hardship affidavit. You can fill all this out and send it to their address, they specify it on the form, including if you use private expedited service. They say it takes one or two weeks. Each case is different. Sometimes, complex cases take longer.

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Significant Changes to the Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA): The Presumption of Abuse and Qualification for Chapter 7 Discharge.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) represented the most sweeping change to the Bankruptcy Code since the modern bankruptcy code was enacted in 1978. It was roundly criticized and opposed by the bench and bar, consumer advocates, and legal commentators, but a potent lobby by creditors, led by credit card banks were able to convince the Congress to enact the significant amendments which were viewed as largely business friendly changes to the law.

Perhaps the most significant change to the bankruptcy code under BAPCPA was the “Presumption of Abuse.” Under the pre-BAPCPA bankruptcy code, debtors could file for bankruptcy under Chapter 7 liquidation or total discharge, regardless of their income level. Under the BAPCPA amendments, debtors had to prove that they qualified for Chapter 7 bankruptcy. BAPCPA creates a method to calculate a debtor’s income, and compares this figure to the median income of the debtor’s state. If the debtor’s household income falls below the median income for the state, then the debtor automatically qualifies to file for Chapter 7 bankruptcy.

If the debtor’s income is above the median income amount of the debtor’s state, the debtor is subject to a “means test.” The means test works roughly like this:

The debtor first calculates the “current monthly income” comprised of all sources of income for the household. The debtor’s current monthly income is then offset by a set of deductions specified by the Internal Revenue Service. In general, the allowable deductions applicable in the means test include:

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