Oops California did it again.

[SD Realtor]

sdr you are correct. Indeed I should have qualified my statement to imply that in no way will this help stem the depreciation cycle. However, yes you did peg it, it does help sellers by adding an implicit constraint on the market. Absolutely.

I just don’t want to be called a liar without being called a liar… again….

Anyways, yes yes yes… I have been ranting about this sort of crap since 06 and though you and I clash on alot of things, you have as well.

I do have to admit I was not as forthcoming with the spring prediction as you were. (admitting you are right really sticks in my craw as you well know)

*********

Kind of Baz… I look at it this way…if I were a seller in distress and I knew that the foreclosure process has just been extended another 3 months, to me that equates to 3 more months of free living. Now I believe, but this is pure speculations, that one of the calculations an asset manager or negotiator for a short sale performs when reviewing a short sale offer, is the net of the short sale verses the net of letting the home go to foreclosure and reselling it. This ruling by the legislature just added 3 months of free living for the homeowner. That also adds 3 months of property tax that the lender has to pay if they do foreclose. It also keeps the asset non performing for that much longer as well doesn’t it?

So my SPECULATION is that it would help to incentivize short sale negotiators to recommend short sale approvals to the investors they service the loan for.

This is a guess. sdrealtor may have more insight on this one but I think it is a sensible leap of faith.

[Coronita]

SDR,

Here’s a dumb question. If you do a short sell, you potentially are subject to taxes on the debt forgiveness, right? However, if you get foreclosed on, it’s not a taxable event, right? I suspect there’s the other angle of being recourse or non-recourse loan. But if someone truely is broke, is the creditor really going to spend additional money to try to recoup money from someone that doesn’t have any?

If that is the case…For some one knee deep in debt, with with no hope of getting any principle back. Wouldn’t it make sense for the person to not do a short sale and have to pay taxes on a debt forgiveness? I understand that from a credit perspective, it’s a choice between having a ding on your credit versus a a much bigger dent…But the way things are going, it’s not like that person would be alone…It’s going to be so much en vogue anyway. If I was going down, I would go down in one big hairball of flames. And with the 90 day extension, I’d just live there longer.

Again, pardon the ignorance in the question. But someone that is way upside down, what really does a short sale buy him/her?

Comments?

[Coronita]

SDR,

Here’s a dumb question. If you do a short sell, you potentially are subject to taxes on the debt forgiveness, right? However, if you get foreclosed on, it’s not a taxable event, right? I suspect there’s the other angle of being recourse or non-recourse loan. But if someone truely is broke, is the creditor really going to spend additional money to try to recoup money from someone that doesn’t have any?

If that is the case…For some one knee deep in debt, with with no hope of getting any principle back. Wouldn’t it make sense for the person to not do a short sale and have to pay taxes on a debt forgiveness? I understand that from a credit perspective, it’s a choice between having a ding on your credit versus a a much bigger dent…But the way things are going, it’s not like that person would be alone…It’s going to be so much en vogue anyway. If I was going down, I would go down in one big hairball of flames. And with the 90 day extension, I’d just live there longer.

Again, pardon the ignorance in the question. But someone that is way upside down, what really does a short sale buy him/her?

Comments?

[Coronita]

SDR,

Here’s a dumb question. If you do a short sell, you potentially are subject to taxes on the debt forgiveness, right? However, if you get foreclosed on, it’s not a taxable event, right? I suspect there’s the other angle of being recourse or non-recourse loan. But if someone truely is broke, is the creditor really going to spend additional money to try to recoup money from someone that doesn’t have any?

If that is the case…For some one knee deep in debt, with with no hope of getting any principle back. Wouldn’t it make sense for the person to not do a short sale and have to pay taxes on a debt forgiveness? I understand that from a credit perspective, it’s a choice between having a ding on your credit versus a a much bigger dent…But the way things are going, it’s not like that person would be alone…It’s going to be so much en vogue anyway. If I was going down, I would go down in one big hairball of flames. And with the 90 day extension, I’d just live there longer.

Again, pardon the ignorance in the question. But someone that is way upside down, what really does a short sale buy him/her?

Comments?

[Coronita]

SDR,

Here’s a dumb question. If you do a short sell, you potentially are subject to taxes on the debt forgiveness, right? However, if you get foreclosed on, it’s not a taxable event, right? I suspect there’s the other angle of being recourse or non-recourse loan. But if someone truely is broke, is the creditor really going to spend additional money to try to recoup money from someone that doesn’t have any?

If that is the case…For some one knee deep in debt, with with no hope of getting any principle back. Wouldn’t it make sense for the person to not do a short sale and have to pay taxes on a debt forgiveness? I understand that from a credit perspective, it’s a choice between having a ding on your credit versus a a much bigger dent…But the way things are going, it’s not like that person would be alone…It’s going to be so much en vogue anyway. If I was going down, I would go down in one big hairball of flames. And with the 90 day extension, I’d just live there longer.

Again, pardon the ignorance in the question. But someone that is way upside down, what really does a short sale buy him/her?

Comments?

[Coronita]

SDR,

Here’s a dumb question. If you do a short sell, you potentially are subject to taxes on the debt forgiveness, right? However, if you get foreclosed on, it’s not a taxable event, right? I suspect there’s the other angle of being recourse or non-recourse loan. But if someone truely is broke, is the creditor really going to spend additional money to try to recoup money from someone that doesn’t have any?

If that is the case…For some one knee deep in debt, with with no hope of getting any principle back. Wouldn’t it make sense for the person to not do a short sale and have to pay taxes on a debt forgiveness? I understand that from a credit perspective, it’s a choice between having a ding on your credit versus a a much bigger dent…But the way things are going, it’s not like that person would be alone…It’s going to be so much en vogue anyway. If I was going down, I would go down in one big hairball of flames. And with the 90 day extension, I’d just live there longer.

Again, pardon the ignorance in the question. But someone that is way upside down, what really does a short sale buy him/her?

Comments?

[peterb]

I wonder how long it will take people to realize that they should just not be paying their mortgages? It’s clear the system would go into failure if the foreclosures were to commence on all upside down homes. Our banking system is en extreme peril.

[peterb]

I wonder how long it will take people to realize that they should just not be paying their mortgages? It’s clear the system would go into failure if the foreclosures were to commence on all upside down homes. Our banking system is en extreme peril.

[peterb]

I wonder how long it will take people to realize that they should just not be paying their mortgages? It’s clear the system would go into failure if the foreclosures were to commence on all upside down homes. Our banking system is en extreme peril.

[peterb]

I wonder how long it will take people to realize that they should just not be paying their mortgages? It’s clear the system would go into failure if the foreclosures were to commence on all upside down homes. Our banking system is en extreme peril.

[peterb]

I wonder how long it will take people to realize that they should just not be paying their mortgages? It’s clear the system would go into failure if the foreclosures were to commence on all upside down homes. Our banking system is en extreme peril.

[SD Realtor]

Good questions flu. Nothing dumb or ignorant about them from where I sit.

I am not an accountant but I believe the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Check with your accountant!!!

I think the limit is 2M.

******************************

So if all things are equal and there is not a taxable event it seems to me it then does boil down to which act will hurt your credit worthiness more in the future. To be perfectly honest I am simply not expert enough to give you a good answer on that one.

In both cases, the short sale verses the foreclosure you essentially can live for free.

Anyways, it is hard to select when talking about other intangibles. I rented out my crown point condo to someone who lost her home to foreclosure. Have not had any problems at all. I am not sure if other landlords would give the not to a tenant that lost the home to foreclosure verses a short sale.

Again though, the bigger question is what hammers the credit rating harder.

[SD Realtor]

Good questions flu. Nothing dumb or ignorant about them from where I sit.

I am not an accountant but I believe the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Check with your accountant!!!

I think the limit is 2M.

******************************

So if all things are equal and there is not a taxable event it seems to me it then does boil down to which act will hurt your credit worthiness more in the future. To be perfectly honest I am simply not expert enough to give you a good answer on that one.

In both cases, the short sale verses the foreclosure you essentially can live for free.

Anyways, it is hard to select when talking about other intangibles. I rented out my crown point condo to someone who lost her home to foreclosure. Have not had any problems at all. I am not sure if other landlords would give the not to a tenant that lost the home to foreclosure verses a short sale.

Again though, the bigger question is what hammers the credit rating harder.

[SD Realtor]

Good questions flu. Nothing dumb or ignorant about them from where I sit.

I am not an accountant but I believe the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Check with your accountant!!!

I think the limit is 2M.

******************************

So if all things are equal and there is not a taxable event it seems to me it then does boil down to which act will hurt your credit worthiness more in the future. To be perfectly honest I am simply not expert enough to give you a good answer on that one.

In both cases, the short sale verses the foreclosure you essentially can live for free.

Anyways, it is hard to select when talking about other intangibles. I rented out my crown point condo to someone who lost her home to foreclosure. Have not had any problems at all. I am not sure if other landlords would give the not to a tenant that lost the home to foreclosure verses a short sale.

Again though, the bigger question is what hammers the credit rating harder.

[SD Realtor]

Good questions flu. Nothing dumb or ignorant about them from where I sit.

I am not an accountant but I believe the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Check with your accountant!!!

I think the limit is 2M.

******************************

So if all things are equal and there is not a taxable event it seems to me it then does boil down to which act will hurt your credit worthiness more in the future. To be perfectly honest I am simply not expert enough to give you a good answer on that one.

In both cases, the short sale verses the foreclosure you essentially can live for free.

Anyways, it is hard to select when talking about other intangibles. I rented out my crown point condo to someone who lost her home to foreclosure. Have not had any problems at all. I am not sure if other landlords would give the not to a tenant that lost the home to foreclosure verses a short sale.

Again though, the bigger question is what hammers the credit rating harder.

[Author]

Posts