Matt Battiata - Battiata Real Estate Group

The Mortgage Debt Relief Act Expires Dec 31, 2012

admin — Mon, 30 Apr 2012 23:16:27 +0000

The Mortgage Debt Relief Act expires December 31, 2012. That means that this is the last year you can do a short sale and avoid having to pay income taxes on the debt forgiveness of the short sale.

And since most short sales take 4-6 months to close escrow, time is running out to do a successful short sale.

If you plan on doing a short sale this year, you need to get started as soon as possible to make sure your short sale closes escrow in 2012.

To get started or for more information, call The Battiata Real Estate Group at 760-930-9898.

Will I Qualify for a Short Sale?

admin — Mon, 30 Apr 2012 23:03:04 +0000

Many people are surprised to learn that they can qualify for a short sale with little or no financial hardship and without being behind on their mortgage payments. This is called a Strategic Short Sale.

In the past, lenders required borrowers to have a major financial hardship and to be delinquent on their mortgage payments in order to qualify for a short sale.

This is no longer the case. Hence, the birth of the Strategic Short Sale.

At The Battiata Real Estate Group, we have done hundreds of short sales for borrowers who have no financial hardship to speak of, and have never missed a payment or been behind on their payments.

If you want to do a short sale on your upside down home, and do not have a financial hardship, it is critical that you hire an agent who is experienced at negotiating strategic short sales.

If you are considering a short sale, contact The Battiata Real Estate Group at 760-930-9898 or email us at info@battiata.com.

How to Minimize the Impact of a Short Sale on your Credit

admin — Mon, 30 Apr 2012 22:46:07 +0000

You can dramatically minimize the impact of a short sale on your credit by continuing to make your payments during the short sale process. There are 2 ways that a short sale impacts your credit: one is the short sale and the other is the missed payments, assuming you stop making your payments.

The primary impact of a short sale comes from the missed payments, not from the short sale itself. This is why you will hear people say that a short sale and a foreclosure are similar as far as the impact on your credit. This is because the lead-up to the short sale or the foreclosure is the same, assuming the borrower is not making payments during the short sale. In other words, in both cases, the borrower misses multiple payments, the lender files a Notice of Default (NOD) and in some cases, a Notice of Trustee Sale (NOTS), although the NOTS is postponed in a successful short sale.

If, however, the borrower keeps current on their payments during the short sale process, the impact is very, very minimal and does not even appear until after close of escrow. “Debt settled for less than the amount owed” is the way a short sale is reported, and it typically only impacts a borrower’s credit score by from 10-50 points, at the most.

Note: I have seen many instances where a borrower with good credit (i.e. mid to high 700′s or higher) does a short sale and keeps current during the process and only incurs a 10-20 point hit on their credit.

So, if you want to minimize the impact of a short sale on your credit, keep making your payments during the short sale process. In addition, be sure you hire a listing agent who is extremely experienced in short sales so that they can negotiate a short sale approval with your lender despite the fact that you are current on your mortgage payments. At The Battiata Real Estate Group, we have done hundreds of short sales for clients who have never missed a payment or been behind on their mortgage payments.

Battiata Real Estate Blog: US Short Sales Surpass Foreclosures

admin — Thu, 19 Apr 2012 04:15:18 +0000

The number of short sales officially surpassed the number of foreclosures in January 2012, according to a Bloomberg News article that quoted a recent LPS study.

Short sales accounted for 23.9 percent of home purchases in January, the most recent month available, compared with 19.7 percent for sales of foreclosed homes, data compiled by the Jacksonville, Florida-based company show.

“It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president in the applied analytics division of Lender Processing Services, said in a telephone interview. “Short sales should be the dominant way of disposing of assets” in distress, he said.

As I have written many times in this blog and elsewhere, while it took them almost 5 years to figure it out, lenders have finally realized that they lose significantly less money when they do a short sale versus going through the foreclosure process.

For this reason, I believe we will see this trend continue as short sales become lenders dominant, preferred method of handling distressed assets.

Seminar for Upside Down Homeowners Sat April 21

admin — Tue, 03 Apr 2012 22:24:22 +0000

The Battiata Real Estate Group will be holding a Seminar for Upside Down Homeowners Saturday April 21 at 10am at The Del Mar Hiltion.

Attendees will get the facts from industry experts on foreclosure, deed in lieu of foreclosure, short sale and loan modification, including the tax, legal & credit implications of each.

Topics will include:

Government and private short sale & loan modification programs (incl. HARP & HAFA) and who will qualify.

Lender Outreach programs offering cash incentives to homeowners of up to $35,000 for successful short sales.

How to do a strategic short sale on your home regardless of whether or not you have a financial hardship.

Short Sale FAQ’s, including rental properties, 2nd homes, luxury homes with loan balances of $1 million & higher, asset protection etc.

Credit impact of a short sale, loan modification, foreclosure etc and how to repair your credit afterwards.

Tax implications: The Mortgage Tax Debt Relief Act (expires Dec 31, 2012) & The Insolvency Exclusion
How to avoid signing a promissory note or making a seller cash contribution in a short sale.

Attendees will leave this seminar with a clear understanding of all of their options. This seminar is FREE but you must register to be admitted as space is limited.

This is our 12th Upside Down Homeowner Seminar in the past year and each and every one has been full to capacity, so do not delay.

To register or for more information call 760-930-9898 or click here

2012: The year of the Strategic Short Sale

admin — Tue, 03 Apr 2012 22:16:30 +0000

2012 is shaping up not just to be the year of the short sale, but the year of the strategic short sale.

A strategic short sale is a short sale with no financial hardship. In other words, the seller makes the decision to do a short sale on an upside down home even though they can make their payments and are not behind. It is simply a business decision; a proactive move to get out from under an upside down property.

At the Battiata Real Estate Group, we have seen a dramatic increase in the number of southern California homeowners who are opting to do strategic short sales on their upside down homes. This may be in part due to the fact that the Mortgage Tax Debt Forgiveness Relief Act expires December 31, 2012. This is the bill that excludes most homeowners from paying taxes on the debt forgiveness of a short sale.

Many people wrongly assume that lenders require a financial hardship in order to do a short sale. While this used to be the case, it is no longer. Most lenders will do a short sale with absolutely no financial hardship in order to avoid foreclosure.

If you are interested in a strategic short sale, contact my office at 760-930-9898 or email me directly at matt@battiata.com.

Buying after a Short Sale: FHA waives waiting period

admin — Tue, 27 Mar 2012 18:43:45 +0000

FHA has introduced new guidelines for homeowners qualifying to buy another home after completing a short sale. Until now, homeowners had to wait 2-3 years after a short sale before they could qualify for an FHA loan. Now, in cases of a medical hardship or relocation due to job change/loss, FHA has waived the waiting period.

Here are the qualifying guidelines for this program:

1) Homeowner must have been current on their mortgage and all other credit obligations for the 12 months leading up to their short sale.

2) Homeowners must document “hardship” defined as:

a) Job loss and subsequent job transfer/relocation.
-or-
b) Catastrophic medical bills (and/or a death in the family) incurred by a member of the borrower’s “nuclear family.”

3) They must be downsizing and relocating to another area.

4) Credit scores must be above 620 and any outstanding collections (i.e. medical bills) need to be paid in full through escrow at close of escrow.

How soon can I buy again after a short sale?

admin — Fri, 10 Feb 2012 00:02:15 +0000

“How soon can I buy again after a short sale?”

“How long do I have to wait?”

As an agent who works with short sales every day, I am asked this question all the time.

The information below is current as of February 2012. I will update our Battiata.com blog as any of these guidelines change.

NOTE:

The waiting periods below do NOT apply when applying for a non government insured loan, or when the derogatory item has been deleted from the borrower’s credit report (i.e. Short sale or missed payments deleted). We see borrowers who have repaired their credit or are borrowing from a credit union etc buying within six (6) months to a year after a short sale.

For more information, go to the websites of Fannie Mae , HUD and Freddie Mac .

2012 Conventional Waiting Guidelines (Fannie Mae)

Short Sale / Deed in Lieu of Foreclosure –

TWO (2) Years up to Maximum 80% Loan to Value | 20% Down Payment

FOUR (4) Years up to Maximum 90% Loan to Value | 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

Bankruptcy

FOUR (4) years after your bankruptcy has been discharged.

Foreclosure

SEVEN (7) years after the sale date of your foreclosure.

FICO score requirement is 660 or higher

Fannie Mae has reduced waiting periods in cases of extenuating circumstances. Extenuating circumstances include:

Death
Illness
Job Transfer
Accident resulting in severe injury

2012 FHA Waiting Guidelines

Short Sale with late payments – You may apply for a FHA insured loan THREE (3) years after your short sale closes escrow.

Short Sale with no late payments – No Waiting Period.

Bankruptcy Ch 7 – You may apply for a FHA insured loan TWO (2) years after your Chapter 7 Bankruptcy has been discharged.

Bankruptcy Ch 13 – You may apply for a FHA insured loan ONE (1) year after your Chapter 13 Bankruptcy has been discharged.

Foreclosure – You may apply for a FHA insured loan THREE (3) years after your home has gone to foreclosure.

FICO score requirement is 640 or higher

2012 VA Waiting Guidelines

Short Sale with late payments – You may apply for a VA loan TWO (2) years after a short sale (unless your short sale was on a VA loan in which case restrictions apply).

Short Sale with no late payments – No Waiting Period.

Bankruptcy – You may apply for a VA loan TWO (2) years after a Bankruptcy.

Foreclosure – You may apply for a VA loan TWO (2) years after a foreclosure.

FICO score requirement is 620 or higher.

Deluge of Short Sales predicted in 2012 as Debt Forgiveness Act nears End

admin — Tue, 07 Feb 2012 17:00:51 +0000

Experts are predicting a “deluge” of short sales in 2012, as under water homeowners race to start & complete short sales prior to the expiration of the Mortgage Forgiveness Debt Relief Act, which ends on December 31, 2012.

The Debt Forgiveness Act, which was passed by former President George Bush in 2007, excludes homeowners who do a short sale or go through a foreclosure on their primary residence from having to pay income taxes on the forgiven debt, with certain restrictions.

Both short sales and foreclosures are considered debt forgiveness, which is considered ordinary income by the IRS and CA State Franchise Tax Board.

After 2012, assuming these bills are not extended, homeowners will be forced to pay income taxes on the debt forgiveness associated with a short sale or foreclosure.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).

A similar bill, passed by the California legislature, mirrors the federal law at the state level, excluding California homeowners from having to pay state income taxes on the debt forgiveness associated with a short sale or foreclosure.

“December 31, 2012 seems like a long way off,” said Matt Battiata, Broker of The Battiata Real Estate Group, and a nationally acclaimed real estate and short sale expert, “but short sales take an average of 4-6 months, and can take longer when buyers cancel or banks are overwhelmed. Since no one knows how backed up the banks may get this year, many people are starting early to be safe.”

Matt Battiata will host his 9th “Seminar for Upside Down Homeowners” March 10, 2012 at the Del Mar Hilton in Del Mar, CA. The Seminar is free but space is limited and past seminars have sold out. To register, go to Battiata.com, click here or call 760-930-9898.

Banks Increasing Cash Incentives for Short Sales

admin — Tue, 07 Feb 2012 16:46:00 +0000

Major US lenders are broadening their short sale incentive programs and offering cash incentives to more and more sellers in exchange for successful short sales.

These programs, in which a seller is offered anywhere from $5,000 to $35,000 cash at the close of escrow of a short sale, were initially started as pilot programs by Wachovia & Chase.

Both Chase & Wachovia realized early on that they lost significantly less money when a seller did a short sale as opposed to forcing the bank to foreclose.

Now, with the perceived success of these pilot programs, other major banks, including Bank of America, Citi Mortgage, Wells Fargo, Litton Loan Servicing & others are starting to offer incentives as well.

“We are starting to see cash incentives more and more for our short sale clients,” said Matt Battiata, Broker of The Battiata Real Estate Group, and a nationally acclaimed real estate and short sale expert.

“We have seen incentives as high as $30,000 paid to our sellers at close of escrow on relatively inexpensive homes. The banks seem to be ramping up these cash incentive programs,” said Battiata.