downtown phoenix homes for sale

Short Sales and Bankruptcies Can Affect Each Other

Seems like we’ve been writing a lot of articles about short sales in downtown Phoenix these days. The fact is, a lot of the homes for sale in downtown, midtown and north Phoenix. Also, many who want to sell their home have to do a short sale since they owe more than the place is worth.

As part of our short sale education program we found an interesting and scary article on the subject of short sales and bankruptcy. Even if you are not in this situation, the information is worth reading. Knowledge is a good thing.

The article comes from our fiends at Thomson Law Group. They provide a lot of good short sale info these days and helps us, as real estate guys, informed. We send special thanks to Doug Farnham for his valuable knowledge and willingness to share it with us and the readers of Urban Connection Realty. Below is Doug’s latest article:

How Bankruptcy Affects Short Sales & Vice Versa

By now, most Realtors are aware of many of the risks associated with short sales.  Either they know someone that has faced litigation or have read about problems that can arise from homeowners that either faced an unexpected foreclosure or who did not understand their deficiency or tax liability.

Recently we have seen a new issue arise for some homeowners that completed a short sale before filing for bankruptcy.  The issue of concern is that a homeowner may no longer qualify for bankruptcy because the sale of their home lowered their debt ratio and, thus they became ineligible under the means test 11 U.S. C. 707. The means test compares the income against the expenses or debts of a homeowner and determines whether a homeowner is eligible to seek relief to discharge debt obligations under a Chapter 7 bankruptcy proceeding.

Residential mortgage debts are an expense which can be included in the means test. By including the residential mortgage debt in the analysis, the probability that a homeowner can qualify for bankruptcy is increased. By excluding or eliminating that debt, the probability of the homeowner to qualify for bankruptcy is decreased or, in some instances, eliminated altogether. So, if a homeowner intends to file for bankruptcy, a review of the homeowners eligibility under the means test should be completed by a qualified bankruptcy attorney before a homeowner is encouraged to complete a short sale.

Another concern arises when a homeowner completes a short sale and then files for bankruptcy some years later.  Since the lender has up to six years after the close of escrow to file a deficiency lawsuit, it is possible that the lawsuit could come after the homeowner has been discharged from bankruptcy.  A bankruptcy attorney may not include the mortgage loan(s) that was involved with a completed short sale if a 1099 has been filed by the lender or if the homeowner fails to tell the attorney of the loans.  However, since the legal effect of a 1099 filing upon a homeowner’s deficiency liability is still in dispute under Arizona law, it is recommended that all loans from previously completed short sale transactions be included when filing bankruptcy, even if the short sale was completed several years prior (at least until the 1099 issue has been clearly settled by the courts).

Short sales are on the increase which means that it is a market segment that Realtors cannot ignore.  We hope this information helps you to avoid the pitfalls and makes you better prepared to handle these issues.

For questions and answers on this subject and many other related topics please visit our blog at: http://blog.MortgageMediationGroup.com

For more info on short sales in Arizona, we have a site dedicated to the subject. Short Sale Phoenix.com

Gene Urban and Ron Urban
The Urban Connection Realty Team
602-234-5777

connecting you to the perfect space

downtown phoenix homes for sale

1916 Classic Bungalow in Roosevelt Historic District

A practically perfectly preserved 1916 classic bungalow with incredible original features like wood floors, dark wood paneling in the living and formal dining rooms, beveled glass front door, leaded glass built-ins, and great windows and panel doors. Combine that with compatible cabinetry in the kitchen, laundry, and pantries, well placed skylights, and exquisite travertine floors and amazing landscaping for an incredible home.  The home features, 2 bedrooms, plus sunroom, 1 and 1/2 baths in 1800 + sq ft of living space on a 10,000 + sq ft lot.

Asking Price is $395,000

For additional information or to arrange a personal viewing of the property, contact Gene Urban

602-234-5777 or info@urbanconnectionrealty.com

downtown phoenix homes for sale

1930’s Ranch style home in FQ Story

This is a great early ranch located on a terrific street in one of the prettiest historic districts.  All of the rooms are nice size, have great windows,  gas fireplace in the large living room, formal dining  and a VERY spacious eat-in kitchen for a 1930’s home complete with vintage stove. The master has a walk-in closet and it’s own full bath.  A large family room, laundry room with storage, and a 2 car garage round out the rare finds in a home of this era. 

The beauty of a ranch is the versatility of style…change the flooring and paint and you could have a retro-mid-century, pottery barn comfy home, or sleek Z Gallerie modern…the possibilities are endless.

Asking Price is $249,500

 

 

 

 

 

 

For more information about this home or to arrange a personal viewing of the property, contact Lyle Plocher at

602 373 3725 or lyle@urbanconnectionrealty.com

downtown phoenix homes for sale

1926 Brick Bungalow in Roosevelt Historic District

This circa 1926 Brick Bungalow exudes beauty, elegance, and comfort from the moment you travel up the flower lined walk and tree filled yard.  A large living room and formal dining room have great expanse with large windows and original wood built-ins on either end of the great room.  A gourmet kitchen offers great counter and cabinet space complete with a spacious eat-in area.  A major renovation in 2007 added the second story with two additional bedrooms, a third bath and upgraded the master suite to include a walk-in closet, sitting area, an exquisite master bath including a soaking tub and french doors to a an equally lovely backyard with gazebo, office, spa, and built-in grill with plenty of green space left over.  The home has 4 bedrooms and 3 baths in 2500 sq ft of living space.

Asking price is $650,000

 

 

 

 

 

 

For additional information or to arrange a personal viewing, contact Lyle Plocher at 602 373 3725 or lyle@urbanconnectionrealty.com