Greetings folks.
On a short sale, can the lender taking the discount, attach assets of the homeowner ie. (home out of state bought and paid for) to try to recoup the loss? Same goes for inheritance money.
Thanks
depends…
if they approve the short sale and accept the purchase price as “payment in full” then they won’t be able to come after any assets. The IRS may have something to say about the assets however! I know that they are working on changing the phantom income tax law on debt forgiveness. does anyone know if this has passed yet?
Make sure you get in writing that the short payoff will satisfy all of the borrower’s obligations to the lender(s).
Thanks for responding.
As far as the lender wanting to see bank statements etc… What’s a good way to “hide” cash? Stick it in a safe or get it in a cashiers check?
Did they use there other house/Account for collateral on the loan? Or did they show it in there Assets when getting the loan? If so the lender will want to know what happened to them.
You could do it as a Don’t ask Don’t tell type of situation on the other hand it could come back to bite them later… The Owner should have put the free and clear property into a trust. Now if they try that it could be turned around on them.
I would say be upfront with the Home Owner and let them know what might happen and let them decide.
Either way when they write there Hardship letter I would leave the ownership of the other property totally out of it.
Hi there.
No. The property was purchased about 4 years ago as raw land, and then improved. They just pay taxes and power bills on it.
So your saying if they put it in a trust now it might cause a red flag? The haven’t contacted the lender yet and aren’t behind but will be in a few months. Now, is when they need to get that done I’m assuming?
Thanks