The Benefits Of Short Selling A Property After Bankruptcy

Posted by Stephen Hachey, written July 4, 2014

When it comes to the big picture, a bankruptcy filing comes with its own list of benefits.  From curing deficiencies to offering debtors a fresh start, bankruptcy can raise insolvent borrowers from the murky waters of bad debt and put debtors back on the righteous path to creditworthiness.  But without a proper strategy, the road back to solvency can be long and hard.  It’s no wonder then that many savvy borrowers are opting to short sell after their bankruptcy discharge.

If you’re among the thousands of debtors who’ve surrendered their homes in a recent bankruptcy, you may be wondering, what’s the point of entertaining a short sale? The bankruptcy has essentially wiped your obligation on the home, so why bother?  Let’s examine some of the numerous ways in which short selling after a bankruptcy can work to your benefit.

It’s not over…

Though you may be relieved to know that you’re no longer liable for the mortgage payments, it may frighten you to find out that caring for the home remains your responsibility.  That’s because, while your personal liability for the debt was eliminated, your name is affixed to the property until your lender has the property foreclosed.

A short sale puts you in control!

A short sale enables you to take the wheel, helping you get rid of the property much more quickly than passively waiting for your lender to foreclose.  Lenders often drag their feet on foreclosures, leaving you to hang in the balance.

In the meantime you will be responsible for the home’s utilities, maintenance, HOA fees and the like.  Not to mention, remaining on the title will make it extremely difficult to qualify for new a mortgage loan anytime soon.

More time at home and less time in wait

For bankruptcies that end in foreclosures, the “seasoning” or waiting time a borrower must wait before qualifying for a new mortgage loan can range anywhere from three to seven years; while the seasoning period after a bankruptcy and short sale can be as little as twelve months!  As a side bonus, initiating a short sale can buy you additional time in your home (at no cost to you!) until the transaction is finalized.

Bottom Line

No matter the type of bankruptcy, having a short sale after a bankruptcy discharge can truly be a benefit to your emotional and financial well being by making the best out of an otherwise unpleasant situation.  A short sale will expedite the recovery time and will result on a much smaller hit on your credit.  If you are considering bankruptcy, or need further guidance on whether a post-discharge short sale is right for you, consult with an experienced bankruptcy attorney to explore your options in greater detail.

Daniel Barli, Esq.

http://www.barlilaw.com 

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 Ticking time bombs in your home (cont)

By Christopher Solomon of BobVila.com

Here is the remainder of last week's post about the ticking time bombs in your home:

Septic system
Why it’s explosive: Homeowners who have septic tanks don’t always like to think about them, Loden says. That’s a mistake. “A septic tank is gonna work until the day it quits,” he quips.

Generally speaking, a septic system breaks down the solids and liquefies them. The liquid then goes out into lines and is dispersed into the surrounding ground. But other materials also reach the septic tank — from sanitary napkins and cigarette butts to foodstuffs such as coffee grounds and grease (particularly if you have a garbage disposal). Over time, the baffles that stop the larger solids from going into the lines can get blocked. If that happens, the system can back up into your house. “That’s not a ‘check engine’ light; that’s an ‘engine failure’ light,” Loden says. “That’s when you end up with a backhoe in your yard.”

Snuff the fuse: If you have a septic tank, have the tank pumped every five years — “and if you have a garbage disposal, you might want to have it done every three years,” Loden says. In Loden’s area of the South, the cost is “between $300 and $500,” he says. “It’s really relatively inexpensive to have it pumped. A lot of those guys will pump it and inspect it at the same time.” It’s particularly cheap when compared with the cost of digging up your yard to repair your system, which can run thousands of dollars.

Old electrical systems
Why it’s explosive: Homes built after World War II, as well as homes built earlier, “didn’t have the same requirements for power that we do now,” Loden says. Homes built today can’t have more than 12 linear feet of space between electrical outlets. This stipulation was intended to minimize the use of extension cords, which can cause fires. The electrical systems of older homes, particularly those outfitted with lots of appliances and amenities, just can’t handle modern electrical demands. Sockets can actually wear out, and switches, too. Breakers become less reliable as they age. The upshot can be a fire.

Snuff the fuse: "Probably every 20 years,” a home should have a thorough inspection of its electrical system, Loden says. Homes built prior to 1980 should definitely be looked at, “and another break point in my region — the Deep South — is 1965. There were a lot of improvements in the 1960s,” he says. You could call an electrician, although Loden cautions that “an electrician may see it as a sales call. Like any trade, they’re there to fix things.” Another alternative: Consider calling an experienced home inspector.

Crawl space 
Why it’s explosive: Few homeowners ever pay attention to their crawl space, that often dank, dirt-floored area beneath many homes. “And why would they?” says Jacques, of ASHI. But you should, because the crawl space is sort of a window into the belly of your home and all its inner workings, he says. It could reveal all sorts of problems before they get bigger:

“You might have a leak in the bathroom under the commode or in a supply line that could be weakening the floor,” Jacques says, and you’d never know it until the day a sag appears in the floor and you need major repairs.
Termite damage can usually be seen there before it appears elsewhere.
Many crawl spaces carry the heating and air-conditioning ductwork that runs throughout a house. But when repairmen clamber about in this cramped space, over time “they might cause some damage to the insulation or to the ductwork. So you could be pumping your nice cold air into the crawl space itself,” Jacques says.
Snuff the fuse: Jacques recommends that a homeowner periodically spend a few minutes with a flashlight looking inside the crawl space as a precautionary measure.


He also recommends occasionally hiring a home inspector to do a more thorough examination of the space. An inspector can look for leaks in plumbing and find faulty or damaged ductwork and worrisome wiring. As well, while often not licensed to inspect for termites, an inspector usually knows enough to point out suspected trouble and recommend treatment or repair.

Read the entire article here.

Daniel Barli, Esq.

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5 ticking time bombs in your home

By Christopher Solomon of BobVila.com

There are some maintenance and repair issues that homeowners just hate to deal with — either because they take time, or cost money, or just don’t seem, well, urgent. But some of these problems can become ticking time bombs, poised to explode if they’re not defused early, when they are more like firecrackers than bombs.

Here are some of the top structural and mechanical time bombs in your home that experts say have the potential to blow up and are worth squelching now — before the big boom.

Foundation
Why it’s explosive: Houses settle. But not all settling is the same. “A lot of times people will ignore the cracks in the brick veneer on the outside of the house, even when they get to be a half-inch or more,” says Bill Loden, incoming president of the American Society of Home Inspectors. Even though that brick is often just the “skin” of the house, a crack that large can signal much deeper problems with a moving foundation, Loden says. Caught early, a repair might cost a few thousand dollars. Caught too late, the tab could run $20,000 to $50,000.

Snuff the fuse: Some cracks in your house are essentially cosmetic, the result of natural settling. When is a crack something more? “If you see a crack big enough to put a No. 2 pencil in, you’re looking at a problem,” says Loden, owner of Huntsville, Alabama-based Insight Building Inspection. Other signs of trouble: a tilting chimney or windows and doors that stick or jam, which can be caused by a moving foundation that is twisting their frames. If you suspect foundation issues, hire a structural engineer to evaluate your house, Loden says.

Roof
Why it’s explosive: ”Most people don’t pay any attention to their roof until they see water coming through the ceiling!” says Bill Jacques, outgoing president of the American Society of Home Inspectors  and owner of American Inspection Service in Charleston, S.C. But if you see drips in your living room, the problem is already far gone. A new roof could cost you “probably $8,000 to $10,000,” Jacques says.

Snuff the fuse: “Some people say, ‘I’ve got a 20-year shingle, it’s gonna last 20 years.’ Well, no it’s not,” Jacques says. “I would just recommend that about every five years they have the roof inspected.” One of the telltale signs of a wearing roof is coarse sand pooling at the base of gutter downspouts; the sand is most likely the granules of the shingles washing off. If you see a lot of it, then it’s a good idea to have someone climb higher. If you can safely get on the roof (be careful!) and the surface feels slippery, that’s another sign that the shingle material is coming off, Jacques says.

You can find evidence of additional problems under the roof. Water will usually enter the attic first. Hire an inspector, or look for stains around the chimney and the stack vents, or around other venting pipes that exit the house. Those are places where the metal flashing can fail, says Jacques. Also, look around the attic for wet and, or damaged insulation. Discovering issues early on could mean the difference between repair and replacement — or a few hundred dollars rather than thousands.

Read the entire article here and we will post the rest tomorrow.

Daniel Barli, Esq.

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Hurdles shrink for jumbo loan shoppers

By Donna Rosato - You'll pay more for a big home nowadays, but a big mortgage should be less of a reach.

For the first time in over 20 years, rates on jumbo mortgages -- loans of more than $417,000, or $625,500 in pricier areas -- are at or below rates on conventional mortgages. Jumbo rates usually run one-quarter to one-half of a percentage point higher, but lenders eager for wealthier customers are making deals.

In 2013, Wells Fargo and Bank of America cut minimum down payments to 15% from 20%; some competitors did too.

"It's a good time to be a jumbo borrower," says Guy Cecala, CEO of Inside Mortgage Finance.

Want a large loan?

Big banks have the best rates; you'll need a 740 credit score or higher to snag them, says Keith Gumbinger of mortgage data provider HSH.

Currently, rates for a 30-year fixed jumbo are averaging 4.25%, compared to 4.35% for a conventional 30-year fixed-rate mortgage. For ultralow rates, check out adjustable-rate jumbos: Wells Fargo recently offered a five-year adjustable for 2.375%. Get an ARM, though, only if you expect to move on during the fixed period.

Read the entire article here and don't hesitate to contact us for any help.

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WHAT IF YOUR HOME DOESN'T APPRAISE?

Written by Blanche Evans

Housing markets are constantly changing, heating up or cooling off. For that reason, bank appraisers are hired by lenders to make sure your home is priced fairly and to current market conditions.

Appraisers use a formula that includes historical trends, pendings, solds, features, amenities and days on market to make sure that your home's current value reflects housing conditions in your market.

Your home's market value has nothing to do with what you paid for it, how much money you need to retire or how much you need to buy your next home. Your real estate agent's market analysis doesn't determine market value - only a range of prices so you can choose a listing price that will help your home sell quickly.

Outside forces such as the economy can cause your home to depreciate. So can allowing your home to deteriorate by not making repairs and updates that keep up with buyer demands.

So what can you do if your home doesn't appraise? You can amend the contract to the appraised price or lose the buyer.

But wait, you may have other options. You can challenge the appraisal.

In some cases, banks use appraisal management companies that hire out-of-area appraisers, or they use low-cost appraisal products like automated appraisals instead of a full professional exterior and interior appraisal.

This is where your real estate professional really earns her stripes. She can determine what kind of appraisal was used to arrive at the home's valuation. If the buyer paid for a full appraisal and only received a drive-by, for example, the appraisal won't reflect your home's interior condition, so your new kitchen won't count.

Your agent can also examine the homes that were used in the appraisal and determine if the comparables are truly similar or not. If not, you have a fighting chance.

Have your agent provide an updated CMA (comparable market analysis.) It could be that new market information is available, such as homes that have sold recently that will help your case.

If the other comparables aren't in your favor, you may have to lower the price so you can proceed to closing.

Read the entire article here.

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