It is this San Jose Short Sale Agent’s opinion that  HAFA and the new California anti deficiency law make the time ideal now for homeowners who cannot make their mortgage payments solve their problem without having to worry about extended obligations to the lenders after the sale.  If a homeowner has made the difficult decision that letting go of the home is the best solution available for their current situation, here are the top 3 reasons or benefits* available to them.

1.  HAFA allows the proceeds of the sale to be used to pay off all of the parties including commissions to the realtors and a $3000 relocation fee to the homeowners and possibly $6000 to pay off a second mortgage.  So there is potentially no out of pocket costs to the homeowner to market and sell the home.   A big burden off the minds of those who are not familiar with the process.

2.  One of the tactics the second lien holders tried to use to extract extra money from the homeowners was approving the short sale but refusing to release the homeowner of the deficiency obligation.   Unless you had an astute Realtor who was aware of this trick and refused to go forth without first obtaining a waiver of the deficiency, homeowners were often stuck owing money to the lenders after they sold off the house.   NO MORE.  The new law says once you permit a short sale approval, the lenders cannot try to retain their deficiency claims.

3.  Finally, until the end of 2012, Mortgage Debt Relief Act,  relieves the homeowners of the capital gains tax obligations of their mortgage debt being forgiven.  Homeowners were often blind-sided by the notion of the forgiven debt being considered capital gains and having to pay taxes on it.   Well, until the end of 2012, this potentially huge tax obligation is waived.   This could be tens of thousands of dollars.  This is huge.

For those who have made up their mind that they need to get out from under their mortgage obligations, the situation is now ideal.  All of the potential hurdles that lay in front of them have now been pushed down.  The only thing that may be problematic is if the homeowner is in a state of shock or denial and unable to take action, and forcing the lenders to take action for them.
These are general overviews, for specific details, please contact us.

Please always deal with people who have actual experience and have data to prove they have successfully completed and closed multiple short sales.  Do your own research, be a smart consumer.  There is much at risk if a short sale goes awry.

*These are my opinions.  I am not an attorney or a tax professional, so please confirm with them first before making your decision.

Wachovia is one of the smarter lenders which understands that, generally, a short sale is a money saving opportunity for them  when compared to when the homeowner is forced into foreclosure or bankruptcy.  They also understand that one of the biggest reasons why typical short sales only close at 23% rate (Campbell Communications Survey, February 2009) is that the process takes too long and even if there is a good offer in hand, the long delay often causes the buyers to back out or simply lose interest and move on to another property.

Wachovia has committed to reaching out to successful short sale agents in a given area and working with them to expedite the process so good buyers don’t walk away from a deal because of the long delay associated with short sales.   Remember, Wachovia isn’t necessarily doing this completely out of sense of compassion, they are doing this because their acturaries have detertmined  expedited short sales will net them more money.  They are setting the new standard in efficiency: 45 days or less is their goal to close escrow from receiving the offer.

If you have attempted a loan modification with Wachovia but were not successful, or have received a Notice of Default or simply do not have other options or solutions, please feel free to contact me.  I can give you a no-obligation consultation as to whether a Wachovia Expedited Short Sale may be an option available to you and your family.