My husband and myself are getting a divorce. We need to sell out current home. We owe more than it is worth at this time. We are going over all options to see what is best. I have heard of getting a buyer to just take over payments with our lender and we would just sign over title. They won't need a down payment and we don't have to get a realtor involved? How exactly does this work and what do I have to do to get this process started? How much would it cost me and the potential buyer? What are the fees? instructions?
State/Country relating to question: Wisconsin
We just started a short sale.
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I certainly understand your concern. Signing over title to the home, would not relive your financial obligation on the note that you signed, promising to pay each month. It would just take away your legal interest in it. If the other person stopped making payments for whatever reason, the lender would go after you for the default and it would have a negative effect on your credit and cause you to be sued in court, for the foreclosure. Your goal should be to eliminate your financial obligation on the loan and that would be at the sole discretion of the lender. They would have to agree to allow this other person to assume the loan and release your obligation on it. It is rare that they would do this but you can certainly speak with them. If not, your other option would be a short sale ( which you said that you started) and see if the lender would agree to waive any balance that might be owed, that the sale does not cover. In addition, you may want to speak with them about a deed in lieu and ask if they would take the property back.
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Hi Donna. Do you know the person who would be taking over the payments?
I don't. I am not sure how to go about getting someone to do that. Would I seek out a realtor?
It would need to be something you do on your own. A Realtor can only help you sell the home and market it to buyers. Like I said, you are really exposing yourself to a great liability of your just trust this person to pay and transfer your ownership interest in the home to them. You can contact your lender today and see if they would even consider it, which I do not think they will. Once they give you an answer, you know about proceeding with the short sale, which a Realtor can help with or if they would accept a deed in lieu. Please let me know if you have any other questions, I would be happy to answer them. If not, please rate me help with 3, ,4 or 5 faces/stars, so I can get credit.
7+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
If we sell at short sale and owe more than we sell our home for, I was told that the IRS will see the difference as income and we will be taxed for it. I was then told that Obama passed a program for people to eliminate paying this tax if the house is sold by the end of 2012.
1. How do we qualify for this program? What do I have to do? Who do I speak too?
2. Does closing have to take place by the end of 2012 to qualify, or just the start of the process?
Also, how does a short sale affect ones credit? My credit is high 700's. All other debt is paid on time and up to date.....even the mortgage, but that will change going forward as we are divorced now and can no longer afford the mortgage.
Sorry for the delay. You would need to speak with your accountant, since it is something which they would have to deduct on your income taxes, to cancel out the gains from the loss. It would need to be done by 2012, not just started. Your credit will be effected as a result of the loan going into default and the 30,60,90 day lates on your credit. A short sale is not as dramatic as a foreclosure but it could drop to the mid to low 600's depending on how long it takes to short sale and each month that goes by where it is reported as late.
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