Michael Bloch, Lifestyles Real Estate

No Taxes on Short Sales in California

Fri, 07 May 2010 15:37:15 GMT

California has enacted a new law, SB 401, which state that Californians no longer have to pay tax on forgiven debt that is part of a short sale, foreclosure or loan modification.

It must be forgiven debt on a "qualified principal residence" This law will apply to debts discharged from 2009-2012. If you already filed 2009 taxes you can file for 540X to amend the return.

This is a big relief to homeowners doing a short sale on their home. For example, if you a homeowner owes $500,000 and sells the property for $400,000 in a short sale, that $100,000 difference, may be subject to state taxes. The federal government passed the "Debt Relief Act", which eliminates the federal taxes, but there was still the state tax. Under this new law, the homeowner will not be taxed in California, which could be a big relief.

I spoken with my CPA, as well as a couple of others regarding taxes on a short sale, and they said even without these new laws, many are exempt from paying taxes due to other issues such as insolvency. In other words, the property owner doing a short sale likely has debt exceeding their assets, making them exempt from paying additional taxes.

Whenever taxes are concerned, I always advise home owners to consult with their tax professional as each individuals financial situation is unique.

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100

Cell 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

How a Watsonville Teacher Bought her First Home for $2000

Wed, 17 Feb 2010 19:21:38 GMT

Nobody is more deserving to be a home owner in Santa Cruz County than our teachers. As a former teacher, I great pleasure from helping teachers purchase their first home. Heidi works as special education teacher in Watsonville and her husband works for Good Will Industries in Santa Cruz. They were able to qualify for a fantastic program called an 80/17 through CALSTRS (California State Teachers Retirement System) The 80 means an 80% of the purchase price is a first loan. This is a fixed rate, 30 year mortgage at a competitive rate. The 17% is also a fixed rate mortgage at the same rate. The kicker is that that the home buyer doesn’t make payments on the second loan for the first 5 years of the loan. This gives the buyers 5 years to get used to their current payment and prepare for an increased payment. There are no surprises or variable rates.

The remaining 3 % (80+17+3=100) is the down payment. This means that 3% of the purchase price must come from the buyers for the down payment. In addition to the down payment there were about $10,000 in closing costs for title, escrow, and lender fees plus prepaid taxes, hazard insurance and mortgage interest. We were all thrilled when the seller agreed to pay the closing costs so really the only out of pocket expense was the 3% down payment. This one happened to be a short sale, so it was the seller’s lender, Chase, who actually approved the $10,000 credit for the buyer’s closing costs.They will also be getting $8500 back from the IRS for the first time credit, so really their true cost was about $2000!

This was not a subprime loan. This was not a variable rate mortgage. This is a fixed rate mortgage on very nice, ten year old, 3 bedroom 2.5 bath home with a nice yard and a 2 car garage for $2000! (out of pocket)

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100

Cell 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

Short Sale and Foreclosure Resource (SFR)

Thu, 21 Jan 2010 15:26:46 GMT

From the National Association of Realtors

Michael Bloch Earns NAR Short Sales and Foreclosure Certification Buyers and Sellers Benefit from REALTOR^® Expertise in Distressed Sales

Michael Bloch has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS^® offers the SFR certification to REALTORS^® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many real estate professionals, short sales and foreclosures are the new “traditional” transaction. REALTORS^® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

“As leading advocates for home ownership, REALTORS^® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said 2009 NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR^® who has earned the SFR certification for these kinds of purchases.”

As you may be aware, Michael is also a Certified Distressed Property Expert. (CDPE).

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100 831.420.2100

Cell 831.588.1588 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

Breaking up is Hard to Do

Sat, 12 Dec 2009 17:25:38 GMT

Have you ever been in a relationship that you knew had no real future and yet it was so hard to break it off? You start out by having occasional doubts. Little by little those doubts become all consuming thoughts. You have trouble concentrating at work and may even lose some sleep thinking about. You know this absolutely will not work out long term, and yet can’t imagine giving it up. Finally, you make the decision to break it off and tell the other person the truth. What once seemed impossible, now feels like a huge sigh of relief. It won’t be easy, but your mind already starts wandering about what your new future holds. This is what many troubled homeowners feel when they finally make the decision to do a short sale; a huge weight has been lifted off their back. Although there are challenges and uncertainty that lie ahead, the homeowner can now stop stressing about what has passed and start making plans for a brighter future.

I have witnessed it several times when helping sellers with a short sale on their home. They usually start out overwhelmed. We start by putting all the cards on the table and looking at the reality of their particular situation. We then lay out all of the different options they can take. For many, attempting a short sale ends up being the best option they have. Then at some point, something clicks. You can hear it in their voice and see it their face. They have made the decision to move forward with the short sale. Immediately, the conversation turns from the “would haves” and “could haves” to planning for what will happen next. Doom and gloom seem to be replaced by hope with even a little bit of excitement. There is the obvious relief from taking a big step toward getting the proverbial “monkey off their back”. There are also a variety of other qualify of life improvements to follow.

One example is a single mom who was paying over $3000 a month to pay for the mortgage on her 2 bedroom condo in Capitola. When her regular teacher pay was not enough, she worked the after school program as well as summer school. This left her all too little time to spend with her son and do many of the things they enjoy to do together. She loves to travel, and that was out of the question. She scratched and clawed to stay current on her mortgage and even applied for a loan modification (which was denied). Finally, when she started using her credit card to pay property taxes she knew that something had to change. This was not sustainable. We went over all of her options and then one day it all clicked. She made the decision to do a short sale and never looked back. She starting saving for a deposit on a rental and even planned a well deserved vacation. When it was all said and done, she moved from her two bedroom condo to a two bedroom apartment. My guess is that her housing cost dropped about $2000 per month. She is still in the same neighborhood, and even a little closer to the beach. Her son was able to stay in the same school and best of all they now have the time and resources to do a lot more fun stuff together. I would say her quality of life has improved. Yes, she did lose the down payment she had put on her condo. Yes, she will probably have a couple of missed payments in her credit report. In my opinion, these loses were greatly outweighed by the quality of life gained.

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100 831.420.2100

Cell 831.588.1588 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

Wachovia (aka World Savings) Fast Track For Short Sales and Loan Modifications

Sat, 14 Nov 2009 09:50:56 GMT

Wachovia (aka World Savings and Golden West) currently has the most aggressive program to help homeowners avoid foreclosure. Today I attended training at the Santa Cruz Board of Realtors put on by a Wachovia Short Sale Manger from Santa Clara In the current world of processing nightmares for short sales and loan modifications, there is finally one lender is “getting it”. It’s not rocket science. When lenders have to foreclose on a home they lose a tremendous amount of money. However, if they work with the homeowner to keep them in the home with a loan modification or allow them to sell short, they are saving huge amounts of money from the bottom line. Wachovia has streamlined their loan modification process and short sale process, making it a quicker and smoother process. They are calling this the FAST TRACK. This means that if you know anyone with a World Savings, Golden West or Wachovia loan that is underwater or having some kind of hardship, we can help them get answers relatively quickly. This also means that if you are buying a short sale, and the seller’s lender is Wachovia, you will most likely have an answer sooner than later. Wachovia says they will have it approved in 45 days or less.

What is also very exciting to actually have a direct contact with a Short Sale Manager at Wachovia. (Wachovia took over World Savings and Golden West so this applies to those loans as well) We have all been transferred through the never ending maze of a customer service phone tree, only to become increasingly disgruntled. Multiply that frustration tenfold when dealing with a large bank like B of A on a short sale. I know have the name, phone number, email, and physical address of an actual person that can make actual decisions on short sales!

Unlike most lenders, Wachovia is not requiring extensive documentation from the property owner to do a short sale. They only require a hard ship letter from the seller and a phone interview. If it is for a loan modification they will also want to see proof that the owner has the ability to pay. This is smart as many other modifications end up in back in default because they can’t afford their modified terms.

Wachovia is also sending out letters to certain homeowners letting them know that their home was “pre-approved” for a short sale. If you get one of these letters, please contact me I can help you understand what it means.

If you or anyone you know would like help with getting qualified for a loan modification or short sale, please contact me and I will be happy to assist you at no cost to you.

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100 831.420.2100

Cell 831.588.1588 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

Successful Short Sale in Capitola

Tue, 10 Nov 2009 23:11:54 GMT

This is a re post of an entry I wrote in 2008. The content however, is still relevant:

I recently completed a short sale in Capitola, in which I represented the sellers. I had read a lot about short sales, taken classes on short sales, and listened to stories from veterans on short sales. Like anything in life the best way to really learn something is by just doing it.

In the current market, “short sale” is becoming a very common term. Sellers are using short sales as a strategy to get out from under a property that they can not afford to keep and the current market value is less than what a buyer is willing to pay. It is often the last resort to avoiding foreclosure. Buyers are using the short sale as an opportunity to negotiate a great price on a property. From my experience with short sales, the best advice I can give to anyone planning on dealing with them is to be extremely well prepared and plan on having a tremendous amount of patience.

For sellers, the most important thing to do is to hire a Realtor that is experienced in short sales and is willing to put in the time it takes to complete one of these deals. I recently represented the sellers on a short sale in Capitola, and must say that it took an incredible amount of time above and beyond the typical listing to get it sold. I was happy to do it because my clients were very cooperative and appreciative and I knew it would help them get out of difficult situation. However, if they had been unorganized or uncooperative, I would have been hesitant to get involved.

Just as with selling any residential property, sellers should have their homes in showing condition, and be prepared to be very cooperative throughout the process. I was fortunate to represent a seller that kept the home very clean and available to show at just about any time. You will also need to provide extensive documentation to prove to the bank that you do not have the income or assets to pay back the loan. Be prepared to supply tax returns, bank statements, and an explanation of the inability to repay. In this case, the bank even wanted to see what they were spending their monthly budget on.

Sellers should also have a back-up plan as there are many variables that are out of you and your Realtor’s control, and there are absolutely no guarantees that the bank will forgive you for the amount you can not repay. Of course, you should always consult with your CPA regarding the financial consequences of a short sale. The good news is that the federal government just passed a bill in December that no longer makes debt forgiveness a taxable event for federal taxes. Previously, if you the bank forgave you for $100,000 the tax code considered that a taxable event, and you would have had to report it as an additional $100,000 in income. There are also other factors to consider such as how it will it will be reported to the credit bureaus and affect your credit score.
For buyers wanting to purchase a short sale property I would also recommend working with a Realtor that is going to be patient, persistent, and knowledgeable about the short sell process. Check back to our blog later, as I will be writing more about the ups and downs of buying short sale properties

Michael Bloch

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100 831.420.2100

Cell 831.588.1588 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

Michael Bloch

Certified Distressed Property Expert

Lifestyles Real Estate

Realtor, GRI, CDPE

Office 831.420.2100 831.420.2100

Cell 831.588.1588 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

The Truth About Mortgage Modifications

Mon, 02 Nov 2009 08:23:43 GMT

The Truth About Mortgage Modifications

The decisions you make as a homeowner today hold a profound impact on your financial future. However, it is important to safeguard yourself from misinformation and fraud. Get the facts regarding your situation and always have a contingency plan.

For those who qualify, a mortgage modification is the ideal remedy to their financial distress. I’ve prepared a FREE report on the truth about mortgage modifications to guide you through this important process. Simply provide your information below to get this valuable information, and feel free to pass it along to anyone who may need it. One homeowner lost to foreclosure is one too many!

As a Certified Distressed Property Expert, I have training and experience in providing solutions to homeowners facing financial hardship. Together, we can formulate a plan to get back on track.

If you have any unanswered questions, or your circumstances are urgent, please call me today.

Michael Bloch
831-588-1588

Options and Solutions

Thank you for visiting this site and taking the first step toward finding answers. I appreciate what it has taken for you to come here, and commend your efforts to get the facts about your situation. The current real estate environment can be frustrating, with misinformation and conflicting plans for how to proceed.

As a real estate agent, what I often see in troubled homeowners is a belief that they are alone with their challenges. Regrettably, over 70% of homeowners in foreclosure proceed without ANY visible assistance. This is not acceptable for the communities I serve.

That's why I've developed this site: to ensure you get the valuable resources that can reduce your financial strain and change your life for the better. As a CDPE I know the options for homeowners in foreclosure or delinquent on their mortgages, and I can send you a report detailing this information, prepared just for you.

Simply enter your information below and click "Send." I hope that you will review this information carefully, so that your next steps are the right steps toward a real solution.

Let me help you evaluate your options and get back on track to a solid, stable future.

Foreclosure Vs. Short Sale

As a Certified Distressed Property Expert, I have devoted my career to helping homeowners who face difficult situations, taking them from uncertainty to resolution. Lately I've found a lot of conflicting information going around, especially concerning short sales, which you should know about.

A short sale occurs when a lender accepts the selling price of a home, even if it is less than the full amount owed on the mortgage. For particular homeowners, this can be the best option to foreclosure. Yet, I still hear people suggest that short sales are basically the same as foreclosure.

This is absolutely wrong!

You need to have the CORRECT information. That’s why I'm glad you're here. To help, I’ve prepared a free report—just for you—that compares the realities of foreclosures and short sales side-by-side. Simply provide your information below, and I'll send you this report.

If you have any additional concerns about this issue, or your circumstances are urgent, please feel free to give me a call. I can help you evaluate your options and get you back on track to a secure financial future.

Michael Bloch 831-588-1588

7 Short Sale Myths

There are millions of homeowners just like you who are looking for answers and don’t know what to do. You’re not alone and you’re in the right place.

As a Certified Distressed Property Expert, I have training and experience in providing solutions to homeowners facing financial hardship. Despite my best efforts, there’s still an overwhelming amount of misinformation about the options available, especially short sales.

To give you a better idea of the short sale option, and to set straight some of the myths you may have heard, I’ve prepared a free report just for you - please fill out the information below to receive your free report. This report will clarify the following myths:

The Bank Would Rather Foreclose Than Bother With A Short Sale
You Must Be Behind On Your Mortgage To Negotiate A Short Sale
There Is Not Enough Time To Negotiate A Short Sale Before My Foreclosure
Listing My Home As A Short Sale Is An Embarrassment
Short Sales Are Impossible And Never Get Approved
Banks Are Waiting On A Bailout And Not Accepting Short Sales
Buyers Are Not Interested In Short Sale Properties

These ideas are potentially harmful to homeowners seeking real solutions. I hope you’ll review this information for yourself or share it with a homeowner in need.

In these times, we all need to know the truth to know how to get back on track.

If you have any additional concerns about this issue, or your circumstances are urgent, please give me a call.

Michael Bloch
831-588-1588

Short Sale & Deed-In-Lieu

Contrary to what you may have heard, lenders actually want to avoid foreclosure wherever possible. That’s why they’re accepting more short sale and deed-in-lieu transactions everyday in an effort to eliminate unnecessary foreclosures. This is great news for homeowners facing financial distress.

To help you understand more about these two options, I’ve prepared a free report just for you, called ‘Short Sale & Deed-in-Lieu: Dignified Solutions.’ To receive your free report, please provide your information in the fields below.

I hope you’ll review these options carefully and pass this information along to those who may need it. I commend your efforts to finding a solution to the difficult financial situation that you or someone you know is currently facing. Providing the best advice and information in your time of need is my priority.

Let me help you evaluate your options and get you back on track to a secure financial future.

Your First Steps To Avoid Foreclosure

Your First Steps

In today’s market, 1 in 7 homeowners is having trouble paying the mortgage. More than 70% of these homeowners proceed without seeking assistance or getting the facts. Many do not even realize that foreclosure is a process, and that there is time to make decisions that may result in a better outcome.

You are not alone. Millions of other homeowners nationwide are in the same circumstances. To assist you, I’ve prepared a free report outlining the first steps a homeowner should take when facing a foreclosure.

Fill out your information below for this free report. Don’t hesitate. Get back on track today!

Strategic Defaults are NOT Strategic

Walking Away Is NOT The Answer

You may have heard that a “strategic default” can be an appropriate and even beneficial reaction to an upside-down mortgage or impending foreclosure. While this idea is widespread, the truth is that default is never an easy road to choose, and rarely ever strategic.

Unfortunately, the ramifications of a “strategic default” are rarely explained, leaving many homeowners stranded on an island of misinformation. To assist you, I’ve prepared a free report outlining the myths and misrepresentations of strategic defaults.

Fill out your information below for this free report. Don’t hesitate. Get the facts today!

Avoiding Mortgage Modification Fraud

I Am An Agent Against Mortgage Fraud!

The last thing struggling homeowners need is to be victimized by fraud. Sadly, some people are preying on those who need help the most. Today, the real estate industry is the newest, biggest target for predatory schemes. In fact, the U.S. Attorney General, Eric Holder, stated that mortgage fraud cases are 400 percent higher than they were five years ago.

With nearly 1 in 6 homeowners unable to pay their mortgages, understand that you are not alone. Knowing your legitimate foreclosure-avoidance options is the best way to fight this terrible trend.

The report on this site will tell you how to avoid mortgage fraud schemes, as well as what solutions are available to you. Enter your information below and get the facts now!

Understanding HAFA

New Help Has Arrived!

The rising number of foreclosures in this country is simply too big to ignore. That is why a government-backed program has been released that aims at streamlining foreclosure avoidance options.

Short sales and deeds-in-lieu are dignified solutions to foreclosure, and now the government is making them easier, quicker and more accessible through the Home Affordable Foreclosure Alternatives Program, or HAFA.

With one in six homeowners struggling to make mortgage payments, you are not alone, and there are options available. With the free report provided here, find out if you qualify for the HAFA Program. Simply fill out your information below to get started on your new chapter of financial stability.

Please read this report to learn the facts, and contact me to begin your journey to a solid, stable tomorrow.

Government Program Surveys

Are You Eligible?

The government programs currently available to homeowners can be valuable resources, but only if you know which ones are right for your situation.

That’s why I’ve created this free resource that lets you find out which programs you’re eligible for. Read the descriptions for each program to see which one fits your situation, then fill out the corresponding survey to see if you are eligible.

Find out now if you are eligible!

The good news is that programs exist for a variety of situations, and even more options are available beyond those programs. As a CDPE-designated agent, I can provide all of your possibilities and help you get moving toward a solution.

Cash for Short Sales

Short Sales are More Valuable Than Ever!

Avoiding foreclosure is always a smart move, but now there are incentives that make it an even better one.

Short sales and deeds-in-lieu are dignified solutions to foreclosure, and now the government is making them easier and quicker through the Home Affordable Foreclosure Alternatives Program, or HAFA, which also gives the homeowner $3,000 for participating.

With the free report provided here, you can learn all the benefits of completing a HAFA short sale. Simply fill out your information below for details on the program and how you would benefit.

Please read this report to learn the facts, and contact me to start exploring solutions.

A Dignified Solution

You Deserve a Dignified Solution

The economy today has been especially hard on homeowners. I meet people every day who thought they made a responsible decision on their mortgage loan, only to be hit with the unexpected.

The first and best move to make in this position is to educate yourself on what your options are based on your financial situation. Avoiding foreclosure is always something worth pursuing if you can, and there really are dignified alternatives available.

To get my free report on all the options and benefits of avoiding foreclosure, fill out the form below and click "Send". If you need immediate assistance, please contact me right away.

I'm here to help.

Credit Score Issues

Don't Let Your Credit Score Drop Unnecessarily

Avoiding foreclosure now could make or break your attempts to get a loan in the near future and determine whether you can get affordable interest rates.

That's why I've made this site available for anyone in our community struggling with mortgage payments. Foreclosure alternatives like short sales and deeds-in-lieu allow homeowners to avoid many of the damaging effects of foreclosure. In addition, short sales may have less of an impact on credit scores than foreclosure.

To get all the information on how these options affect your credit score, fill out the form below and click "Send". If you need immediate assistance, contact me right away.

I'm here to assist you.

Hidden Costs of Bankruptcy

Considering filing for bankruptcy? There may be alternatives you've never considered …

If you are having trouble paying your mortgage and are possibly considering bankruptcy, there may be better solutions for your particular circumstances. I've created the free report available on this page, "The Hidden Costs of Bankruptcy," to provide more information.

Alternatives to foreclosure, such as conducting a short sale and moving into a rental residence with less expensive payments, may offer the breathing room you need to reorganize your finances.

To get your free report, fill out the form below and click send. However, if your situation is urgent and you need immediate assistance, please don't hesitate to contact me.

I'm here to assist you.

Short Sale vs. Foreclosure

Foreclosure or Short Sale: Understand the Differences

Underwater on your mortgage? Facing foreclosure? Avoiding foreclosure through a short sale can have many benefits for your future financial stability.

I created this site to help spread the word about the options to avoiding foreclosure, and a short sale has many benefits. A successful short sale can reduce the damage to one's future loan eligibility, credit rating, employment, security clearance and more.

For a free report on the differences between short sales and foreclosure, fill out the form below and click "Send". If your situation is urgent, feel free to contact me immediately. I'm ready to help you take action and secure a more secure financial future.

As a CDPE-designated agent, I've been trained to pursue foreclosure alternatives, and I'm here to help.