Property in Arizona that I have owned since July of 2006, purchased and occupied for 12 months before moving to the East Coast in July of 2007. I have never been late or missed a payment on my mortgage. I now own a home on the East Coast where I live and have been renting the Arizona home for 3 years. I am $160K upside down in the Arizona Home and come out of pocket $1000+ a month to finish the mortgage, hoa’s, taxes, etc. I currently have the property listed with an agent in an attempt to do a short-sale, but with so many homes on the market it is not getting any offers. My question is, if I am able to complete a short sale will I be responsible for paying taxes on the amount the mortgage company cancels, will I be liable to have the mortgage company come after me for the difference owed since this is a rental property. Please note that the loan is still the original loan from when we lived there, so it’s not a “second property” or a “investment property” loan.
To “the tax lady” -
To make sure I am on the same page and understanding you correctly.
I Purchased for $270,000 07/2006.
I lived in it for 12 months and in 07/2007 converted it to a rental and the FMV at that time was $235,000 (this would be a $35K depreciation that doesn’t count).
From 07/2007 to today my FMV has dropped to approx. $100,000 for a total depreciation while a rental of $135K.
If I am understanding you correctly and I short-sale for $100K, my mortgage company will be taking a loss of $170,000 total and if I minus my $135K depreciation while a rental, this would leave me with $35,000. Are you saying that I would be reporting $35,000 as income on my taxes? I think this is what you are trying to say. Look forward to your feedback and thank you.

P.S. Do you know if the mortgage company can come after me for the difference or do I qualify under the Arizona Anti-Deficency Act?

I’m looking for a house to purchase, so I’ve been working with a real estate agent since February. Two years ago, I worked with him for a couple months before deciding I wasn’t ready to purchase a house. I currently have an offer pending on a short sale property, but have continued to look for non-short sale properties to see if something better (and quicker) popped up.

I saw a house I liked at the very beginning of my search, but since I found the short sale property that same day, I decided not to make an offer. Two weeks ago, I told him I changed my mind and did want to make an offer on it, especially since it was move in ready and a normal listing. He then told me that the company listing it had gone out of business, and that it should pop up on the MLS again within a couple days. It was still popping up under the original listing, which was by a different agency than the one he was talking about that went out of business. Also, he kept saying it was a short sale, when I know for a fact it was a normal listing. I’m pretty sure he was talking about a different house listed on the same street. I continued to ask about it every couple days, and then yesterday he told me it was still available and we could go see it again today. Then today, he told me an offer was accepted on it last night. Seriously, this is one of the only normal listings in my area, and I kind of feel like I just have gotten screwed out of being able to receive the $8k home buyer’s tax credit.

Should I look for a new agent? He’s shown me probably 50+ houses, but I still feel like this is bull. I didn’t sign any kind of agreement with him this time around, although we do still have that short sale offer floating around on someone’s desk somewhere. Would I have any legal ramifications?

I have been speaking with Alan Campos who is the President and CEO of “Fairway to Heaven Investments, LLC” and he has a partner named Brian North of Live Free Investment Group, they handle the short sale division of his company. Alan himself is not a realtor so legally he can talk to me as a home owner with a house currently listed on the AZ MLS through a Realtor. We are trying to do a short sale on our home in Arizona and we have had no traffic looking at the house in the last 2 months. This company will make us an offer today and we will go through the Short Sale process with the bank to see if they will approve or not. Alan contacted our realtor (that we have a listing contract with) to discuss handling the process from here including all the paperwork, negotiating with the bank and the offer will be made today. Of course my realtor will not get the 3% sellers listing commission (which is only $3,000 or less since the house is on the market for $100K), but instead this company is offering him a referral bonus of 25% at the closing of everything. My realtor told them no and that we will find a buyer and that we are not interested in going this route without speaking with us first. We have not spoke to our realtor yet, but Alan did call me back yesterday to say that our Realtor is not looking out for our best interest right now by not considering this deal. We have no offers let alone people looking at the house so going this route only makes sense.
Before we approach our realtor with our thought on wanting to go this route, I would like to see if anyone has heard of this company or done business with them. Is this a good decision to make. Also Alan has explained to me that we would be putting our home in a trust, which would allow them to market our home to their investment buyers while we are waiting for the banks decision. This way when we close in a few months they have a buyer lined up that will buy it from them after our closing date is complete. Alan said we still own the home and we are not signing it away to them or anything like that. Has anyone ever heard of this also? I just don’t want to get scammed and I only want to go this route if it will all work out. Looking for help???
P.S. If I can have the deal done without putting our home in any kind of trust, what is everyones thought then?

I put an offer on a house that fell out of escrow 5 months ago. The previous sale price was 300k and the buyer’s lender said it was NOT worth that amount, their appraisal was 280k and things fell through.

We had two agents do neighborhood/market comps and they came up with an appraisal of 270k to 285k. I offered the bank 275k, no demands, 20% down (I am already approved as well with excellent credit), etc. The market has NOT appreciated since the last sale, it is the same or possibly worse, so the house is still not worth 300k.

The seller’s accepted our offer and sent it to their bank for approval. Their bank came back to us and said they REFUSE to take less than 300k. On top of it, the house is scheduled to foreclose in a week and go to auction that same day.

Why would the bank reject our offer when it is fair market? They have no other offers and it will go to foreclosure where they will lose more money and not get the 275k I am offering. They know even if we gave them the 300k they want it is a) not appraised at that much and b) we will not get financing because it is worth ~20k less than that.

We are clueless. Any ideas?

Location is Henderson, Nevada

I’ve been denied for a loan modification 3 times now by the investor, my mortgage servicer said the reason is “deficit income.” The deficit income is after I included my mortgage amount (if I had pay it) and others bills versus our income. I’ve missed about 9 payments, then I paid $900/month for 4 months due to a forbearance payment plan when I went on disability leave, after the 4 months, I submit a new mod. package, and it was just recently denied (3rd time). I’ve asked the rep that I have to have a positive income to qualifies for assistant? She said my investor does not participate in loan modification and therefore does not decrease interest rate or extend the term of the loan. I then said so it won’t help me at all to lower my payment, the rep said if I have a negative, they can’t really help. It doesn’t make sense to me. Please advise on how much positive to qualify for them to consider helping me. What if they said I have a positive income and won’t decrease the payments that much? I have no hope on this investor since every time they said my investor doesn’t do loan mod. Should I just gave up and request for a short sale before they set an auction date (which is anytime now)? Thank you for your advise.

I have been in a short sale for over a year, my money has been in ESCROW for 13 months. Do I have any rights to some of the ESCROW interest? My contract says my realtor’s comany has the right to collect interest, but does not mention me, is this legal? I am in Florida.

current score is about 800, must sell home on short sale, not worth remainder on mortgage, bank will lose about 20k on short sale versus 35-40k if foreclosed. how much will short sale affect my score. never late on ANY payments for anything ever. will only do this if bank agrees not to pursue me for shortage in writing.
I have been told that short sale showing paid/settled on my report is the lesser of the evils by many different people.
can guaranty tax on 20k is a lot less than 20k. especially after deductions. nopt worried about tax worried about credit damage. what if i buy another house before short sale or foreclosure, can they come after that?

I understand that our credit would take a hit but our home would not sell for what we owe in todays market and we have only lived in this home for 4 yrs so we have no equity in it!!!

Someone said that if I do a short sale on my home I have to use it as income on my taxes but every dime of the money would be going to the bank so why would I have to claim it as income I wouldn’t be making anything off of the sale.
I would not be making any profit from the sale on my home it would all have to go to the bank so why would I have to claim it as income?