Short Sale concerns

[JacaG]

We are considering selling our house via short sale because I am sure it will be years before foreclosure happens and we want to buy again sooner than later and want the house out of our name- the house is in AZ and we have moved out of state and are currently renting.
Anyway..I spoke to a realtor that specializes in short sales and he thinks we would qualify, my husband got laid off in 2009, we filed for Chpt7 that was discharged 12/2010, etc. and he thinks it should sell, I guess he has worked with BofA before.

So my concerns are:
1- giving the bank my tax returns, bank info. What can happen if I give them that info. The house was included in the Chpt 7, my husband is now working and now that the Chpt 7 is done we have actually saved about $10,000 that i kinda feel guilty about, like we should be paying for the house that's been sitting in AZ since 2009. Can the bank look at our finances and say no because we are doing better now or access and try to get money after the short sale for the deficiency amount?
2- tax liability for the deficiency amount; i have read about a program that forgives that amount through the year 2012- we do only have 1 loan on the house.
3- the loan is FHA, are there any issues that i should know with the loan being FHA, the realtor said that FHA calls the shots with FHA loans, BofA is involved but that it ultimately was up to FHA.

The realtor seems to be knowledgable I am just looking for other opions that aren't motivated by selling something. I am so nervous about making a bad decision financially again that I want to make sure I'm doing the right thing. Thanks!

[despritfreya]

I am prefacing this by stating that IMHO your attempting to do a short sale is a complete waste of time especially since you are dealing with BOA. Your realtor may tell you “no problem. We will have the deal closed within 3 months of submitting an offer”. If the realtor tells you this, run, do not walk, run in the other direction cause it is just not going to happen that quick. Since you are with BOA it will take you close to, if not more than, 1 year to close. A complete waste of time an energy. If you do nothing eventually BOA will foreclose. Now, on to your questions:

1- giving the bank my tax returns, bank info. What can happen if I give them that info.

Nothing except your personal financial information - including your SS #- is sitting on someone’s desk.

2- Can the bank look at our finances and say no because we are doing better now or access and try to get money after the short sale for the deficiency amount?

No to both. A) If BOA says “no” its because the folks that make decisions at BOA or FHA (see below) have nothing between their ears. More likely those folks will never respond with a definitive yes or no in any reasonable length of time. B) The debt was discharged. You owe $0.

3 - tax liability for the deficiency amount. . .

There is none. The debt was IIB.

4 - the loan is FHA, the realtor said that FHA calls the shots with FHA loans, BofA is involved but that it ultimately was up to FHA.

This is actually correct but since BOA is involved what do you think the likelihood is that all proper documents will be sent by BOA to FHA?

What I don’t know is how far behind you are. You mention 2009. Are you 2 years behind? Knowing this will help me tell you how long it will take to foreclose in AZ.

Des.

[JacaG]

Thanks so much for the info and input.

We stopped paying June 2010 just before filing, the house was put up for sale in 2009- not a single offer in the 1 year it was for sale.

I know what you are saying about it being a waste of time and BofA, but if it gets the house out of our name sooner rather than later without problems I can stop worrying about it and move on.

[despritfreya]

We stopped paying June 2010. . .

And no Notice of Trustee Sale from Recontrust? Wow, that is a long time.

Des.

[JacaG]

The only thing BofA has done is the relief of stay. I would know if they did something else- right? I even checked Pima county clerk of courts to see if any thing was filed.

So it is safe to give up the financial info and there isn't anything the bank can have me sign that i would be on the hook for paying if the short sale goes through? Would there be state taxes I would have to pay on the deficiency amount?

[despritfreya]

The only thing BofA has done is the relief of stay. I would know if they did something else- right? I even checked Pima county clerk of courts to see if any thing was filed. So it is safe to give up the financial info and there isn't anything the bank can have me sign that i would be on the hook for paying if the short sale goes through? Would there be state taxes I would have to pay on the deficiency amount?

Would you know? Well, that depends. The Notice of Trustee Sale is sent regular and certified mail. If the lender does not have your current address you would not get a copy. But, your realtor and negotiator would have access to the information and, since you have been checking with the Pima County Recorder (not the clerk of the court - if that is what you meant, pull up the County Recorder's web site as that is where you will find the info) then nothing is going on at the moment.

As to the financials, if you are set in doing the short sale then you have to go through the hoops. Nothing you give now will change the effect of your discharge.

Des.

[helpmeout]

Why bother with a short sale? The mortgage was discharged in the BK. It's more work for you. Ask the bank if they want to do cash for keys, if they say no, oh well.

And if you do decide to proceed with the short sale, let everyone know that they will have to do so without the requested financial information. As for the taxes, well, the debt was discharged due to insolvency. There are no taxes on the foreclosure or short sale.

[JacaG]

The bank does have our current address so then nothing is going on with BofA- big surprise Thanks again, I guess we have some thinking to do.

[JacaG]

I thought I read somewhere something about state taxes on the deficiency amount (the 1099 they send) from a short sale....maybe I misunderstood.

[dspii]

I'm dealing with BOA right now.......what a PITA. We were discharged in Dec 2009, I was transferred to Nevada for work, can't sell my home in Ohio for asking price....so a short sale or walk away is my only choice. And I'm not sure if the offer our buyers submitted has even been looked at.....absolutely no movement what so ever.

I chose the SS route because I was current in my pay n stay and FHA says if your current at time of short sale, you are elgible for a mortgage immediately after the sale (2 yrs post BK). With the horror stories of foreclosures taking years........I didn't want to add 3 more years to it before I could buy a home. We rent now, with the option to purchase anytime.