Foreclosures Help Information

Archive for May, 2008

Foreclosed Property

Question: How do you report a foreclosed rental property to the IRS?

I have a rental in 2006 and 2007 and reported it to IRS.
In 2008 the property was foreclosed. Therefore, no rentals to report in 2008. I need to have closure to this transaction and let the IRS know that this rental property no longer exixt. I would apreciate any help

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Answer: A foreclosure is nothing more than a forced sale. The sales price is generally the amount of the outstanding mortgage on it. You report the disposal of a business asset on Form 4797. Don't forget to subtract the depreciation allowed or allowable while it was held as a rental from your basis. This is true whether you took the depreciation or not when you were renting it out. The gain or loss is reported on Schedule D.

Courthouse Foreclosure Property Auction: DROdio Attends

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Tax Foreclosure Properties Michigan

Question: Double mortage foreclosure in Michigan, I need an expert!?

I need someone who has a little knowledge regarding mortgage foreclosure- we're going to see a lawyer in the next few days, but we're a little nervous, so any knowledge for a little piece of mind would be a huge help! My fiancé' has a house with a $150G mortgage, and a second mortgage of $60G debt consolidation. Unfortunately, he made some business investments that went wrong (basically he got F*). The $60G is money that someone owes him that he will never get back. Michigan economy is going from bad to worse. We tried to sell his house. We did a lot of work and now it's gorgeous, but we can't get anyone in to see it. Even so, the most the house will sell for is $175G. That leaves $35G gap. It's getting bad for us. It has been suggested that we just foreclose. Sounds good and all (We know it ruins the credit-got that covered), but two big questions: Can we foreclose on both mortgage without them repossessing anything and in that case, do we stop paying property tax as well? HELP!

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Answer: They are only going to take the house, they cant take anything inside the house. Here is what will happen the first forecloses if the second mortgage doesnt pay off the first they are screwed they dont get a dime. And you dont owe them anything. Its in the seconds mortgage best interest to make a deal. If you can find a buyer or do a short sale they might take the 25K and walk away.

Maybe you can get the first to pitch in 10K so they dont lose as much. It happens all the time. Find a real estate agent that deals in short sales. That way its not a foreclouser against you.

Chances are if you have that big of a second at sale its going to go for at least what you owe on the first. But if it doesnt say it only sales for 160K You will owe a deficiance Judgement of the difference to the first for 15K. They will sue you for that.

The bank will set a price of say 150K If anybody bids say 151K and the bank doesnt buy them out. Even though the bank lost 25K they cant come back on you at all. Its only if the bank buys it back at the sell.

Trust me the bank doesnt want your house. Work with them. If they know its foreclosing they will want a short sale if you can work it out and find a buyer. They dont want to market it and sale it. They will take their loss now.

Email me if you have any further questions off my profile. I hope this helps, good luck.

Property Tax Foreclosures

Bank Foreclosure Sales

The bank foreclosure process is a several step process which is activated by a bank which owns a mortgage that is not being paid on. Typically a bank will take steps to correct the situation prior to beginning the bank foreclosure process. This is due to the fact that this foreclosure process is quite costly to the bank and under most circumstances the bank will end up losing money on the resale of the home as well making it a huge overall loss to the bank.

There are actually three common steps associated with a bank foreclosure. The first step is when the bank files for lis pendens or suit pending. Essentially this stage is when the bank files a formal document with the court system indicating that they have no received a mortgage payment for a period of time. Most banks will allow around six months of no payment before proceeding with this step.

The second step of the bank foreclosure process is when an attorney representing the bank formally requests an auction to be held on the house. The goal of this form of auction from the banks perspective is to hopefully sell the property off for more than what the mortgage is for. The opening bid always belongs to the bank and it is for the current mortgage amount. Under most circumstances no bids will be made on the property since in most cases the properties are worth less than what is owed on them.

The final stage of the bank foreclosure process is when the property transfers back to the bank. At this point the property is known as a bank owned property or real estate owned property. At this point most banks will attempt to sell the property at anywhere between ten and fifteen percent below market value since the property is considered to be a liability by the bank.

Can Buying Bank Foreclosure Properties be Profitable

The profit making potential of a bank foreclosure property varies widely based on the situation. Typically a bank foreclosure process can be bought in any of the three major stages of the entire foreclosure process. In the lis pendens stage the property owners may be allowed by the bank to perform a short sale. In some rare circumstances properties can be picked up at or below the market value. It is fairly rare to get a great deal in this stage since even if the owners try to sell at a great price the bank will usually decline the deal. Auctions on an extremely rare occasion can yield great deals. Unfortunately since most people who end up going into foreclosure fail to make any payments at all or only make one or two from the time they bought the property the mortgage value is usually equal to or greater than the actual property value. Buying bank owned properties in the right market can be extremely profitable but even these can carry potential pitfalls.

Under normal circumstances banks will list these properties at 10% to 15% below market value but they often require extensive rehab work. In some extremely weak markets bank owned properties can be found which are selling at 30% to 50% below market value. At this point these properties can become great investments.

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Article Source: ArticlesBase.com - Understanding the Steps of a Bank Foreclosure

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