Foreclosure University

Your Online Real Estate Investing Resource

Foreclosure University – The Ultimate Investor Resource

Foreclosure with Tenants

by 1 Comment

I’ve recently lost my job (2nd time in 3 years) and its making it hard to keep my house. I had to move from Indiana (where house is located) for a job, but couldn’t sell it (too much owed for what worth). I have tenants in the house, but I still lose money every month. Its come to the point that I can’t afford it and I simply want to let it go.

I’ve attempted several times to reach my mortgage company’s hardship department via fax (their only method of communicating with them) and they have not called me back.

What happens if they foreclose on the house while I have tenants in there? I don’t want that house at all, but its much better than going through BK. Your input is appreciated.

Short Sale Tax Liability to Seller

by 4 Comments

Several years ago i had property go back to the lender..my debt was 150K…
the back accepted an offer from an investor for 125K …the following
January i rec’d a form 1099 from the bank showing a “charge off” of 25K ..which is treated as ordinary income…i was’nt expecting this….

Now fast forward to now.. i have a deal working to get a short sale accepted to save this seller from foreclosure and give him a little moving cash…  Seller thinks all is well and i’m a great guy till next Jan. when he gets a 1099-c for income he’s never seen..

QUESTION?…do i tell him in writing up front that there could be tax liabilities and risk the chance of losing the deal?

Suggestions? comments?

Answer:

Absolutely without question you tell them they will be receiving a 1099 for the amount that was forgiven.  The tax liability would be worse if it wasn’t for you, right?  They are either going to 1099 them or file a judgment ANYWAY… Regardless of what you do!  You are actually bettering their situation.

This is a common concern for most investors, however there is a solution. There is a form the IRS puts out that counter acts a 1099. You can find it on www.irs.gov. It is form 982. Yes, you should always disclose to the seller the risks involved, but your main concern is a deficiency judgment now.

You need to read the Short Sale Secrets ebook that I have, it would help you tons…

Lesson in Title Search For Foreclosure Properties

by 3 Comments

Here are some Lessons I learned in Title Search For Foreclosure Properties

I can understand that when looking at foreclosure auction prices, most of the properties look like a bargain. You have to understand where the auction price came from, before getting too excited about it.

Let’s first understand how the property happened to be in foreclosure. A common reason is that current owners did not pay their mortgage or tax bills on-time, causing bank or municipal/state/federal government to place a lien against the property, in other words, the mortgage lender or government wants to get payment on the current owner’s obligations by any means, even if they have to go through the foreclosure expense and auction the house to recover the owed amount or gain possession of the house to sell it latest via real estate agency (REO properties).

If the current property owner had a single lender, then the amount you see at the foreclosure auction might be the only debt against this property (key word is might). In the case where the current owner had, say, a home equity loan in addition to home mortgage(s), there may be two or more liens against the property from different mortgage lenders. Whichever lender files “notice of default” first and puts a lien against the property gets to foreclose on the property first. The payout from foreclosure action to lenders or government always happens in order of court filing. The only way for you, as an investor, to find out what liens, mortgages, debts exist against the property is to order a Title search.

Foreclosure auctions (sometimes called sheriff’s sale) are typically held in the municipal (county) courts. The County does not offer you any protection against additional liens on the property, nor do they guarantee you a clean title. Lenders or government agencies are always represented by top notch real estate lawyers, which do not care about your interests and are only interested in selling the property at the auction.

Enjoy!

Welcome to Foreclosure University’s Blog

by Leave a Comment

Welcome to the Foreclosure University blog. It’s been interesting and fun at the same time. As all of you probably know, now is a great time to begin investing in any kind of real estate. Deals are all over the place. Now is the time to GO BIG if you can! Don’t limit yourself to just foreclosures either. We are seeing developments half finished, (now in foreclosure) that you can pick up for .40 on the dollar. Same with multi units that were half finished and they just ran out of money. A lot of good stuff going on out there. Let’s take advantage of it while we can. When I hear of any exciting news that will help you, I’ll be sure to let you know. Feel free to leave your comments and feedback. The more we help each other the better.

Success is Yours

Jarad