Archive for the ‘Real Estate’ Category
Monday, January 30th, 2012
If you are holding an unaffordable mortgage that substantially exceeds your home’s present value, you have several options: a federal HARP or PRA loan modification to reduce your mortgage to your home’s fair market value; a short sale of your home; a deed-in-lieu-of-foreclosure with agreement to void the remaining mortgage; or even a strategic default and foreclosure. The disadvantage to these options is that mortgage debt that is “forgiven” or “eliminated” is generally considered taxable income. However, legal strategies can allow you to avoid paying tax on this fictional “income.” (more…)
Posted in Foreclosure, Home Ownership, Real Estate, Selling a Property, Short Sale, Taxes
Friday, December 23rd, 2011
One of the most persistent problems in commercial real estate contracts is the tendency of the parties to “agree to agree” on some aspect of a contract at some future time. The problem is twofold: an agreement to agree is not generally enforceable, but both parties to an agreement have the obligation to act in good faith so as not to deny the benefits of the agreement to the other party. If one party detrimentally relies on an “agreement to agree,” and the other party then fails to negotiate in good faith, the result may be that a court makes the “agreement to agree” enforceable on whatever terms it decides would be fair. (more…)
Posted in Business Disputes & Lawsuits, Business Real Estate, Buying a Property, Real Estate
Wednesday, November 23rd, 2011
There is no statewide California law that automatically protects your home’s pleasant views. However, if your views are impaired by something on your neighbor’s property, local laws and regulations, and your development’s CC&R’s (if you have them) may provide the protection you need. (more…)
Posted in Boundaries, Home Ownership, Real Estate, Views
Friday, October 28th, 2011
Many San Diego real estate owners learn too late how issues with zoning and zoning variances (special use permits) can stall their plans to build or develop real estate, or jeopardize deals to buy or sell real estate. To keep your goals or project on track, you should find out before you sell or buy property exactly what it is zoned for. If you inherit property, its zoning should be one of the first things you find out before you make any use of the property or put it up for sale. (more…)
Posted in Business Real Estate, Buying a Home, Buying a Property, Real Estate, Zoning
Friday, August 19th, 2011
Owning a condominium is very different from owning a house. Condominium owners typically do not have to worry about outside maintenance on “common areas” shared by all the owners, such as landscaping, swimming pools, and roofs. For the most part, the condominium homeowner’s association – or HOA – pays to take care of repairs and maintenance of the condominium common areas by collecting monthly dues from each owner. However, when an injury occurs in a common area, the insurance policy of the unit owner has becomes extremely important. (more…)
Posted in CC&R's, Home Ownership, Real Estate
Monday, June 20th, 2011
The Straddling Library:
In the small town of Derby Line, Vermont stands a beautiful 110 year old Romanesque-style library. The Haskell Library appears to be a typical Vermont library, but its location is particularly strange. The building sits directly on the border of Ontario, Canada and Derby Line, Vermont. You enter the Library in the United States, but walk to the circulation desk, and you’re in Canada. (more…)
Posted in Boundaries, Business Real Estate, Home Ownership, Real Estate
Wednesday, December 22nd, 2010
According to a recent Los Angeles Times article over 2 million homes are slated for foreclosure in the United States. However, it is possible to halt a foreclosure in some cases.
The Foreclosure Process in a Nutshell
When a borrower defaults on a loan the lender may seek to foreclose on the property either judicially or non-judicially. In a judicial foreclosure the lender files a court complaint to foreclose on the property. The borrower can answer the complaint by stating any defenses that might exist. If no valid defenses exist, the court orders foreclosure, the property is attached, and the property is sold at a public auction. (more…)
Posted in Foreclosure, Real Estate
Friday, September 10th, 2010
Thankfully, there are many ways to avoid a foreclosure. One particular option has become so appealing to homeowners and lenders that the current presidential administration included it as part of its Home Affordable Foreclosure Alternatives Program. This option is the “deed in lieu of foreclosure”.
What is a Deed-in-Lieu of Foreclosure?
A deed in lieu of foreclosure occurs when a homeowner voluntarily transfers legal ownership of property to a lender in exchange for the lender’s promise not to foreclose. The primary advantage is that unlike a foreclosure, a lieu of foreclosure does less damage to borrowers’ credit histories. According to Fannie Mae, a distressed homeowner may be able to qualify for another home mortgage in less time than they would be able to had they gone through a foreclosure. (However, under the FICO credit scoring method, a deed in lieu of foreclosure is reflected as an account that was “not paid as agreed.”)
Will a Deed in Lieu of Foreclosure Work If a Foreclosure Has Already Started?
If a homeowner is already facing foreclosure it may be possible for the homeowner to offer a “deed in lieu of foreclosure” to a lender in exchange for the lender’s promise to stop foreclosure proceedings.
Have a Team of Experts Ready
As with any decision that will have an impact on your tax liability and estate plan, it is best to consult an experienced real estate attorney to discuss the possible consequences — both positive and negative — of any alternative to foreclosure. The process of a deed in lieu of foreclosure may require that a borrower hand over a written agreement expressly stating that the transfer is made voluntarily. Also, while a lender may accept a deed in lieu of foreclosure, income taxes may have to be paid on the amount that the lender is not able to recover after the lender sells the home. It may also be possible to negotiate the terms of the deed in lieu of foreclosure transfer in a way that is actually favorable to a homeowner. For example, Bank of America is not only soliciting distressed homeowners, but in some cases is offering cash incentives. A very recent Los Angeles Times article cited some incentives as being as much as $15,000, a lot of money for a homeowner who need a fresh start.
Because California law limits the extent of services that can be provided by so-called “foreclosure consultants,” a homeowner who faces foreclosure is best served by working with a seasoned real estate attorney who is familiar with the process and has a network of industry experts to step in where needed. If you are facing foreclosure, the real estate attorneys at San Diego Law Firm can carefully evaluate your situation and help you obtain whatever option is both open to you and workable for you. That may be a deed in lieu of foreclosure, a Chapter 13 bankruptcy plan that allows you to keep your home, or negotiations for a delayed foreclosure, cash incentives, or other favorable terms in giving up your home. Please call us today at (619) 794-0243 for an appointment.
Posted in Foreclosure, Real Estate
Friday, August 20th, 2010
Depending on your age and financial circumstances, taking out a reverse mortgage may be an excellent financial decision. However, a reverse mortgage has long-reaching effects, and you should not decide it on it in haste, or without carefully considering all your alternatives. An attorney who is experienced in estate planning and real estate can advise you of the effects a reverse mortgage will have on your future finances and on your spouse and adult children should you pass away, and may even be able to help you use the reverse mortgage to pay off an onerous subprime mortgage, freeing up more money for you to live on. (more…)
Posted in Home Ownership, Real Estate
Monday, June 21st, 2010
During times of recession and economic downturn many homeowners find themselves in the position of having to decide what to do with real estate that they can no longer afford. According to data gathered by the California Department of Real Estate, in 2009, nearly three-quarters of all sellers in California sold their homes as a result of financial difficulties. And according to the National Association of Realtors, the number of short sales has increased nationwide. Whether it is an investment property, a vacation property, or the family home, understanding your available options and their outcomes is important if you need to decide what to do with real estate for which you worked so hard, but can no longer afford.
What is a Short Sale?
A “short sale” in real estate refers to a sale of real estate that falls short of the loan balance owed on the mortgage. When a property is sold in this manner, the lender allows the property to be sold for an amount less that what is owed to them. Under a short sale the lender may agree to “write-off” the difference between what remained on the loan balance and what the property actually sold for. It does not necessarily guarantee that the difference will be forgiven by the lender; instead, this is something that has to be negotiated with the lender.
What is a Foreclosure?
A “foreclosure” is a proceeding that allows a lender to end all ownership rights when the owner of a property stops making mortgage payments and is in default. Basically it allows the lender to reacquire the property. While each state is different, in California the lender generally has a right to pursue a property owner for the deficiency owing after the foreclosure has taken place. This means that if your property is not sold, or the purchase price was not enough to cover the balance on the loan, the lender can turn the loan over to debt collectors, or sue you for the balance still owing, and/or pursue payment from you even if you file for bankruptcy.
However, there is an important exception to this rule: the lender has no right to collect a deficiency from you if the loan was used for the original purchase of your primary residence, and you still live there. If you refinanced your home, or if the loan was for a second home, commercial property, or investment property, this exception does not apply.
Why a Short Sale May Be a Better Option for a Distressed Homeowner
There are a number of reasons that a short sale may be in the best interest of a seller who needs to let go of a property. One important advantage to a short sale pertains to future home purchases. For example, Fannie-Mae, the Federal National Mortgage Association, adjusted their guidelines in 2008 to allow an individual that successfully completes a short sale to be eligible for a Fannie-Mae baked mortgage package after only two years. In contrast, an individual who loses their home to a foreclosure will not be eligible for a Fannie Mae backed mortgage for five years.
Another advantage to a short sale would be in the area of credit score issues. The impact of a foreclosure can be a downgrade of your credit score anywhere from 200 to over 300 points, and it will affect your score for a minimum of three years. However, the impact of a short sale on your credit score can be as little as 50 points and its effect can be as brief as 12-18 months.
How to Start a Short Sale
If you think you might be interested in short-selling your home or other real estate, it is best to talk to a legal expert about the process and related legal issues, such as potential tax consequences to you when part of your mortgage loan is forgiven. The skilled real estate attorneys at San Diego Law Firm have specialized experience in handling short sales as well as a unique knowledge of the real estate market. To schedule a consultation, please call San Diego Law Firm at 619-794-0243.
Posted in Home Ownership, Real Estate, Selling a Home, Selling a Property
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