Georgia Short Sales: Little Known Facts

Courtesy of Christy Cole of Bouvette Properties

In a short sale, the homeowner NEEDS to sale their real estate, the house is worth less than what is owed on it, and the homeowner does not have the funds to make up the difference owed to the mortgage company.
Once a homeowner is to the point of the terms of a Georgia short sale approval being issued in writing, the “demand letter” will outline the acceptable terms of a purchase and sale agreement, as well as how the mortgage company will release liability.

After closing, a homeowner will probably receive a 1099 in the mail from the sale of the home.  Regardless if the homeowner is fully released from the debt or not, the IRS considers this unpaid debt as extra income to the homeowner.  Back in 2007, President Bush enacted the “Mortgage Debt Relief Act”, which is in place through 2012.  By meeting certain criteria, someone facing an Atlanta Short-Sale could be excused from this taxation.  Call me to find out if you might be exempt from taxation.

Let’s say the short sale is granted, buyer and seller agree to the terms.  Georgia law allows mortgage companies to pursue homeowners in court for a deficiency for unpaid debt.  So even if a homeowner completes a short sale, there is the possibility of legal action in the future for the mortgage company to try for more money, if the “demand letter” includes such verbiage.  HOWEVER-if the mortgage company sends a 1099 to the homeowner after closing, they have given up the right to sue for a deficiency!!!  The mortgage company either goes for recovery of the balance through a judgment or writes off the debt and sends a 1099.

For more information Contact:

Christy Cole, Short Sale Specialist
Direct 678-300-3756
If you are interested in Henry County Real Estate Click Here:  Henry County Real Estate
If you need assistance on a Henry County Short-Sale, Chick Here:  Henry County Short-Sale

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