If you want to be in a disturbing situation the quickest way to get into trouble is when you do not pay your mortgage and the bank sends you a foreclosure letter. When you do get yourself in that situation for whatever reason, going into a mode of not answering the phone and feeling sorry for yourself won’t do you much good. In order avoid foreclosure in Fairfax a short sale may be a viable option so it is of paramount importance that you get the best help you can afford for you to save your home and credit rating.

Basically what happens in a short sale as the name implies is you sell your property at a huge discount wherein a lender may agree to execute a short sale while the homeowner is still making mortgage payments to avoid foreclosing on the home. Even with the foreclosure company acquiring the home for a fraction of the original mortgage amount, say they buy a home worth $100,000 for just $80,000, you still continue to owe the original amount. This yields to a 20% discount for the buyer. However, you will still need to deal with that remaining debt.

Your mortgage company has two options for dealing with the rest of the mortgage debt. At any rate, these options are both under the assumption that you’re still accountable for whatever amount is still owed on your mortgage. For the remaining debt, the mortgage company has two options to get this from you, either through a foreclosure deficiency judgment or via a 1099 form. The deficiency judgment will mean you still owe the remaining difference of $20,000 to the mortgage company.

A deficiency judgment is only filed against you after the short sale is completed and you are able to avoid foreclosure in Fairfax. Being issued a deficiency judgment is a lot like being sued wherein a judge can rule you still owe the remaining debt from your former property. Most mortgage companies don’t want to make life difficult so if you can prove financial hardship the company usually agrees not to file for a deficiency judgment. As a workaround, what they will do is consider the $20,000 a business loss and consequently send a 1099 form instead of a deficiency judgment.

In the event you do receive a 1099 form in lieu of a foreclosure deficiency judgment, you will have to declare the deficiency as income with 10-15% of it going to the IRS. At the end of the year, the amounts listed in the 1099 will have to be declared as income. The income declared in the 1099 will be taxed appropriately as mandated by law, based on the fact that it is still income earned, but it will not significantly impact the tax for the whole year because not much income was earned on the same year. In essence, only 10% of the income listed in the 1099 will be owed as taxes.

When you short sale to avoid foreclosure in Fairfax, you will end up owing some money. Depending on how the short sale was handled, you could end up either owing to a mortgage company or to the IRS. Although an amount remains to be owed after a short sale, it is a much better alternative compared to a foreclosure which not only lowers your credit score but also prevents you from making loans in the future.

Foreclosure doesn’t have to be an option…avoid foreclosure in Fairfax now. If you want help in saving your home, get in touch with us…avoid foreclosure in Fairfax.

Relax many of us are having the same issues with our portfolios these days…avoid foreclosure in Fairfax now. The team is ready and willing to help you figure out your options for avoid foreclosure in Fairfax.

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