Buyers Running Out of Time for Short Sales
Foreclosures are speeding up since the recent multi-billion dollar mortgage settlement. As expected it appears very few will be helped and most will only see the sheriff showing up to evict them a lot sooner than anticipated.
Fortunately processing times for short sales have also been accelerated thanks to new systems and rules put in place by major lenders like Bank of America as well as Fannie Mae. This means sellers no longer have to hang around in limbo for months on end to fid out if their lender will approve the transaction. Those selling their homes for cash can get out even sooner and avoid foreclosure auctions and ugly evictions.
Cash incentives for borrowers opting for short sales are still out there, with some homeowners reportedly receiving over $20,000 to aid with their relocation. Unfortunately some of these programs are due to expire in August, leaving only a few weeks for homeowners to market their homes and find a buyer if they want any hope of walking away with cash.
There could also be serious and seriously expensive tax consequences for those who don’t complete their short sales before the end of 2012. The Mortgage Forgiveness Debt Act is set to expire then along with the tax break on the amount of mortgage debt forgiven by lenders. Otherwise it will be counted as income and taxes will be owed on it.