Mortgage Forgiveness Debt Relief Act of 2007
Prior to the passage of this law, for any debt that was forgiven in a short sale or foreclosure, the homeowner would receive a 1099 and would have to report this forgiveness or cancelled debt to the IRS as income.
The law was passed on December 20th 2007 which eliminates the phantom tax on debt cancellation in mortgage discharge from January 1st 2007 to January 1st 2011 as long as the debt was incurred on a principal residence. (So this doesn't apply to investors)
A couple key things to note about this. Debt for a second mortgage or HELOC (Home Equity Line of Credit) is not eligible. Debt for a second home or investment properties is not eligible. Up to $2,000,000 is eligible on the principal residence.
Rob Alley, Realtor at Keller Williams Charlottesville
Certified Short Sale Specialist in Virginia
Certified REO Property Specialist
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Wednesday, July 22, 2009
Mortgage Forgiveness Debt Relief Act of 2007
Mortgage Forgiveness Debt Relief Act of 2007
Prior to the passage of this law, for any debt that was forgiven in a short sale or foreclosure, the homeowner would receive a 1099 and would have to report this forgiveness or cancelled debt to the IRS as income.
The law was passed on December 20th 2007 which eliminates the phantom tax on debt cancellation in mortgage discharge from January 1st 2007 to January 1st 2011 as long as the debt was incurred on a principal residence. (So this doesn't apply to investors)
A couple key things to note about this. Debt for a second mortgage or HELOC (Home Equity Line of Credit) is not eligible. Debt for a second home or investment properties is not eligible. Up to $2,000,000 is eligible on the principal residence.
Rob Alley, Realtor at Keller Williams Charlottesville
Certified Short Sale Specialist in Virginia
Certified REO Property Specialist
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Prior to the passage of this law, for any debt that was forgiven in a short sale or foreclosure, the homeowner would receive a 1099 and would have to report this forgiveness or cancelled debt to the IRS as income.
The law was passed on December 20th 2007 which eliminates the phantom tax on debt cancellation in mortgage discharge from January 1st 2007 to January 1st 2011 as long as the debt was incurred on a principal residence. (So this doesn't apply to investors)
A couple key things to note about this. Debt for a second mortgage or HELOC (Home Equity Line of Credit) is not eligible. Debt for a second home or investment properties is not eligible. Up to $2,000,000 is eligible on the principal residence.
Rob Alley, Realtor at Keller Williams Charlottesville
Certified Short Sale Specialist in Virginia
Certified REO Property Specialist
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
The Problem of PMI & Charlottesville Short Sales
The Problem of PMI & Charlottesville Short Sales
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
The Problem of PMI & Charlottesville Short Sales
The Problem of PMI & Charlottesville Short Sales
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Buying Charlottesville Homes from a Wholesaler
8 Reasons to buy Charlottesville houses from an experienced Real Estate Wholesaler:
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Buying Charlottesville Homes from a Wholesaler
8 Reasons to buy Charlottesville houses from an experienced Real Estate Wholesaler:
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Charlottesville Homeowners with 2nd Mortgages
Charlottesville Homeowners with 2nd Mortgages and the options they have.
You probably know that Charlottesville bankruptcy judges do NOT have the
power to reduce the principal of a first mortgage in the event you file for bankruptcy personally.
There was a move to change this. But the powerful lobby for the big elite banks defeated it in congress.
But are there cases where filing a Charlottesville bankruptcy can wipe out a mortgage?
Regarding 2nd Charlottesville mortgages...I have read that the US bankruptcy code section 6 allows for wiping out a second mortgage in a situation where the 1st mortgage loan amount is greater than the current value of the home.
Such that the second mortgage becomes an unsecured debt and subject to the bankruptcy provisions.
Is this true or even possible in your experience?
In a personal Charlottesville bankruptcy, if the second mortgage has no
equity coverage, the judge can turn the second mortgage into a personal loan and you can discharge it in bankruptcy.
Let's look at an example.
Say you owe $200,000 on a first and $100,000 on a second.
And say your Charlottesville house is worth $150,000.
The second has no equity at all.
The judge can turn the second into an unsecured loan, upon a motion that you bring in Charlottesville bankruptcy court.
The loan is then handled like a credit card or medical bill.
It is unsecured and can be discharged.
But don't think you have to file for bankruptcy in order to handle a second mortgage this way.
You can do a short sale, and often pay the second a few thousand dollars and get a release of liability.
But what if the second won't give that release to you?
You may be able to negotiate a small note for the second.
Or just let it go and hope they don't come after you.
If they do come after you, you can always file for bankruptcy later.
Oftentimes, a second mortgage can be handled by paying them a small amount and doing the Charlottesville short sale, and then just putting things off.
What you can put off until later will often be much easier to handle.
You probably can settle these left-over second mortages for a fraction of what you originally owe, quite often.
Without a Charlottesville bankruptcy.
And while improving your FICO score.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
You probably know that Charlottesville bankruptcy judges do NOT have the
power to reduce the principal of a first mortgage in the event you file for bankruptcy personally.
There was a move to change this. But the powerful lobby for the big elite banks defeated it in congress.
But are there cases where filing a Charlottesville bankruptcy can wipe out a mortgage?
Regarding 2nd Charlottesville mortgages...I have read that the US bankruptcy code section 6 allows for wiping out a second mortgage in a situation where the 1st mortgage loan amount is greater than the current value of the home.
Such that the second mortgage becomes an unsecured debt and subject to the bankruptcy provisions.
Is this true or even possible in your experience?
In a personal Charlottesville bankruptcy, if the second mortgage has no
equity coverage, the judge can turn the second mortgage into a personal loan and you can discharge it in bankruptcy.
Let's look at an example.
Say you owe $200,000 on a first and $100,000 on a second.
And say your Charlottesville house is worth $150,000.
The second has no equity at all.
The judge can turn the second into an unsecured loan, upon a motion that you bring in Charlottesville bankruptcy court.
The loan is then handled like a credit card or medical bill.
It is unsecured and can be discharged.
But don't think you have to file for bankruptcy in order to handle a second mortgage this way.
You can do a short sale, and often pay the second a few thousand dollars and get a release of liability.
But what if the second won't give that release to you?
You may be able to negotiate a small note for the second.
Or just let it go and hope they don't come after you.
If they do come after you, you can always file for bankruptcy later.
Oftentimes, a second mortgage can be handled by paying them a small amount and doing the Charlottesville short sale, and then just putting things off.
What you can put off until later will often be much easier to handle.
You probably can settle these left-over second mortages for a fraction of what you originally owe, quite often.
Without a Charlottesville bankruptcy.
And while improving your FICO score.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
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