Welcome to LVShortSales.com

We have set up this page to help homeowners here in the valley who are facing foreclosure. As everyone is aware, Las Vegas is one of the worst hit Real Estate Markets in the country. If you have received a letter from us, then a Notice of Default has been filed by your lender. These are filed after a homeowner is at least 4 months past due.

This can be a very difficult time for homeowners facing foreclosure. We understand what you are going through and can help. The first step is figure out what works best for you. We have compiled a list of some of the choices you have.

1. Nothing. The lender sells the home at auction. This is a little confusing because at auction the lender needs to sell the home for what is owed on it. In our market, most of the homes are upside down. When this happens, the home goes back to the bank and becomes an REO( Real Estate Owned) property. You will then be evicted from the home and given days to move out. A big factor is if you have a foreclosure on your credit you will have to wait 5 years before you can buy a home through Fannie Mae or Freddie Mac.

2. Loan Modification. This should be your first thing to do! The lender does not want the property back. If you have a financial hardship, health reasons, loss of employment or decrease in salary, the lender may try to work out a repayment plan, move past due amounts to the end of the loan or spread out the missed payments over time. Please call your lender and ask for the loan workout or loss mitigation department. They will require your financial worksheet with bills and pay stubs, a hardship letter and past tax returns. This can be a long process for the lender to review your file, but it could keep you in your home. We highly recommend this especially if you want to save your home.

3. Deed in Lieu of Foreclosure. This is an alternative to foreclosure where the home owner signs over the deed to the lender. There are 4 main conditions for a lender to consider a deed-in-lieu.
1. Foreclosure is imminent and unavoidable
2. The borrower is unable to sell the property.
3. There should be no other liens, or attachments to the property.
4. The property needs to be left in broom clean condition.

4. Bankruptcy. This option can liquidate debt and/or allow more time. Chapter 7 (Liquidation) To completely settle personal debt. –Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years. –Chapter 11 (Business Reorganization) A business debt solution. Please contact a qualified attorney to find out what your options are.

5. Short Sale. This when you sell the home for less than what is owed on the property. In most cases it is more advantageous for the bank to do a short sale than go through the foreclosure, carry the property, list the home and still have the closing costs and commissions that they would with a short sale. Another advantage of a short sale is you can buy a new home in 2 years after a short sale with a Fannie Mae Freddie Mac.

Regardless of what choice you make, your credit is going to take a hit. Whether you have a foreclosure or a short sale you are looking at a 200 to 300 point hit on your credit. Below are the two most frequently asked questions before someone does a short sale.

1. Can the lender sue for the deficiency? The answer is yes. They can file for a deficiency judgment within 180 days of the foreclosure or short sale. Regardless of what you do this is a reality. When you do a short sale, it is because there is a financial hardship. They have a copy of your financial and can see it does not make financial sense to spend more money on attorney fees etc. to pursue.

2. Is there a tax liability? If the lender agrees to the short sale, the lender will issue you a 1099 for the short difference. The Mortgage Forgiveness Debt Relief Act of 2007 is an IRS code which addresses the tax consequences to a Seller of a Short Sale. You should speak to a real estate lawyer or a tax accountant to find out whether you will be exempt from these taxes or not. Generally speaking, if the property is a primary residence you are exempt from paying taxes on the 1099 amount entirely. If you have an investment property you maybe able to show you are insolvent on tax form 982 to help with the tax penalty of the gain. This means you have more debt than assets. Again we are NOT attorneys or accountants so you should consult competent professionals with these important issues.