short sale properties in downtown phoenix

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

short sale properties in downtown phoenix

Buying Downtown Phoenix Homes in As Is Condition

Several of our Urban Connection readers have asked us what AS IS means when buying a home or condo in the downtown Phoenix area. This comes up often when people are buying bank owned homes or short sales.

Lender owned homes seldom offer the option of having repairs made to the home and the majority of people selling their home as a “short sale” simply don’t have the money to make repairs. Therefore, as a home buyer, you will be asked to sign an addendum to the contract that explains what is expected of you and the seller when selling a home in “AS IS” condition.

Your Urban Connection Team has created a little YouTube video that gives offers an overview of the AS IS addendum created by the Arizona Association of Realtors. Below is the video:

Obviously, this is simply an overview of the Short Sale Addendum and does not go into all the nuances and implications of the document.  However, we hope it gives you a broader understanding of what as is means when buying a home or condo in downtown Phoenix, AZ.

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

short sale properties in downtown phoenix

Information About HAFA and Short Sales in Phoenix

Short sales are big news in the real estate industry these days. With a large number of people owning more on their home/condo than its worth, folks are pondering a short sale as one of their options. This is evident in the downtown region with about 1/4th of all active listings being short sales.

The US Government, for better or worse, has adopted a program called HAFA (Home Affordable Foreclosure Alternative) to help streamline the short sale process. Some of our readers have emailed asking: What is the HAFA program?  We are here today to answer that question.

In case you don’t know. the Urban Connection team launched a site dedicated to information about short sales last Fall. We have well over 100 pages of short sale articles, short sale news, an FAQ section and much more. We just added a page describing the HAFA program and its guidelines. Below is a link to that piece so you can be an expert on the HAFA program and impress your friends and coworkers with your in depth knowledge on the subject.

What is the HAFA Program for short sales in AZ?

If you know someone who needs more information about short sales, please know we are there for them. Short sales are not for everyone and there are legal and tax issues that need to be explored before moving forward with this option. We would be delighted to help navigate the short sale waters.

Gene Urban & Ron Urban
The Urban Connection Team
602-234-5777
Gene@UrbanTeamAZ.com

connecting people to the perfect space

short sale properties in downtown phoenix

Lenders Use Deception to Get Promissory Note Signed

Many of our readers know we are very involved with people trying to sell their home by short sale. We have a dedicated short sale site, Short-Sale-Phoenix.com and have written dozens of articles on the subject including our newest about how some lenders and PMI companies use lies, mistruths and threats to intimidate homeowners into signing promissory notes. I know you are shocked a bank would do such a thing… Not.

Anyway, we just posted a real world example of the email one of our clients received from their lender. Our clients are ideal short sale candidates… they both lost their jobs, the husband’s new job pay 40% less and is 30 miles from their house, they can no longer afford their house payments, they had just one loan and they did not refinance and take money out.

We listed their home last January and  a well qualified buyer was brought in by an agent. The short sale package was professionally put together by a law firm who handled the conversations between the lender and the homeowner. Five months later we finally get conditional short sale approval from the lender.

Check out what the bank had to offer after 5 months of lender red tape on our sister site, UrbanLIfe Blog.com.

Lenders and PMI Companies Use Mistruths and Intimidation

short sale properties in downtown phoenix

Live-work modern condo at PRD 845

This 1800 + three level, loft like unit has great live-work potential with ground floor space that features concrete floors, powder room and separate entry.  Large great room and slick modern kitchen on 2nd level, master bedroom on the 3rd level.  Great mountain and city views from great room, master and balconies.  Private attached garage.  Intimate 12 unit condo community with green features, built in 2007.  Walk to Cibo’s, Margaret T Hance Park, Japanese Friendship Garden, Dodge Theatre and Grand Ave galleries, bars and cafes.

This property is priced at half of what it last sold for.

Asking $200,000 subject to short sale approval.

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

Listing is courtesy of Power Realty Services