It’s no secret that completing a short sale can be confusing and frustrating for the seller. One thing that is often overlooked, that can save a LOT of headache, is who’s name is on the title and who’s name is on the mortgage.
There are many circumstances that cause these names to be different, the main one being if one buyer doesn’t have the credit or income to be named on the loan, but both buyers want to be considered “homeowners” regardless.
Below are some questions you may be asking yourself:

1. How does this affect the sales contract? Any documents pertaining to the sale of the property (any contracts or disclosures) must have the names and signatures of whoever is on the title, regardless of whose on the loan.
2.  How does this affect the short sale packet? The Third Party Lender will only require documents from whoever is named on the loan, regardless of who is named on title. That means that if only 1 homeowner is named on the loan, paystubs and bank statements for the other don’t need to be submitted or included in any financial statements. Unfortunately, this means their debt can’t be used to prove a hardship either.
3. How do I find out who is the on the loan and who is on the title? Your monthly loan statements will indicate the names of every person who is named on the loan. You can contact the title company who closed the transaction, or you can contact your Country Recorders Office, to find out who is named on the title. If you currently have your property listed with a Realtor ®, they will have ordered a Property Report from their title company, which will also have this information on it.

Having a missing signature on a contract can severely slow down the transaction process. Submitted financials for someone who isn’t on the loan can confuse the bank and end in them declining a sale based off financial information they shouldn’t technically be taking into consideration. So, before you sign a purchase contract or submit your hardship packet, make sure you’re clear who needs to sign what and whose financials have to be included.  If you have any other questions regarding a short sale or the sale of your home,  please contact the Frei Team to assist you with all your needs!

Delays in the Utah Loan Modification Process

I received a call from a very frustrated and distraught homeowner today. For the last few months she has tried frantically to make contact with her lender and work out a repayment plan or Utah loan modification. She and her husband had run into some financial difficulties that caused her to fall a couple months behind. They have since recovered and had saved a few thousand dollars to help catch up the back payments. She made numerous attempts to get her lender to identify the amount of money necessary to bring her loan back into good standing. They kept telling her that they couldn’t discuss the numbers over the phone but would mail them out to her. Week after week they never came. The homeowner finally went so far as to obtain a PO Box address and notified the lender of the change of address. Still no communication identifying the amount needed to bring the loan current.

Lender Sets a Foreclosure Sale Date

Just the other day the homeowner made another attempt to contact the lender and identify the restatement amount. She spoke with a rep who told her that there was a foreclosure sale date scheduled 14 days from now. The homeowner couldn’t believe what she heard. Now she is scrambling to find a way to avoid foreclosure and keep her home. She may end up having to file bankruptcy to stop the foreclosure.

Delays are not Uncommon

This story is not uncommon. I talk with homeowners everyday that are faced with foreclosure in Utah. Many who have been working with their lender for months trying to successfully negotiation a loan modification in Utah or a repayment plan just to find out that the lender is not agreeing to their request and oh…by the way…there is a foreclosure sale date right around the corner.

Have a “Plan B”

Although I don’t have a great explanation for why this happens, I do want to caution homeowners who have all their eggs in the Utah loan modification basket. If you are currently in foreclosure and trying to work out a repayment plan or loan modification, you may want to have a “plan B”. A short sale my be the “plan B” you are looking for. To learn more about short sales in Southern Utah, visit our website or contact the Frei Team directly!

Some homeowners in financial distress think that they can just let their house go back to the lender through foreclosure or short sale and they will be able to move on with their lives. What they don’t realize is that there are repercussions after foreclosure or short sale. One of those repercussions is taxable income from cancelled or forgiven debt.

In a foreclosure or short sale situation, the lender may forgive the remaining balance of the loan. This is good for the homeowner because it relieves them of what is often a large deficiency balance, but doesn’t mean they are completely off the hook.  Under the tax law, cancelled or forgiven debt is considered income to the borrower and the lender is required to send the borrower a 1099c– a tax form used to identify cancelled or forgiven debt.

Having to pay taxes after the homeowner has lost their home is less than ideal. Fortunately, the tax law also spells out circumstances when a homeowner will not have to pay taxes from forgiven or cancelled debt. These exclusions include the following:

• Debt canceled when a person is insolvent.
• Debt that qualifies under the Mortgage Forgiveness Debt Relief Act

Before choosing to do a short sale or let the property foreclose, the homeowner should consult with a competent accountant to identify what tax consequences they may have to deal with. They should also ask about the exclusions listed above.

The Frei Team specializes in Southern Utah Foreclosure prevention and short sales in Southern Utah. If you are facing foreclosure or considering a short sale, contact us now. We can help you understand your options and answer your questions.

“Experience is the best teacher.” We hear this statement often, yet many of us don’t realize that it is rarely the warm and fuzzy moments in our lives that we learn from the most. Usually, our greatest life lessons come through our worst experiences. In short, we learn most from our failures. Perhaps another way to say our opening statement is that “FAILURE is the best teacher (or preacher).” In other words, failure is a gift.

Now, I know that we don’t usually think of failure as a gift. None of us wants to find failure neatly wrapped and waiting for us under the Christmas tree. No one ever sets out to fail. Well, at least you and I haven’t. There are no best-selling books on “10 Steps to Failure”, but everyone who has ever found success has had to walk through the waters of failure. Show me a successful person, and I guarantee that he or she experienced some form of failure before they reached the pinnacle of success. In fact, failure does not PREVENT success…in most cases it PRECEDES it. *Now, I’m preaching!*

In the sentence of life, failure is a COMMA – not a PERIOD. Failure should cause us to pause and reflect, but it should never cause us to stop! There have been many times that I experienced failure in my life. It was those moments that allowed me to pause, reflect, and then move forward. If I had stopped at my point of failure, I suspect there would be no Pro Bowls, Super Bowls, Truth Youth Organization, PrimeU Prep Academies, or Hall of Fame.

All of us have the potential to make it to the “Hall of Fame of Life”, but the road to the Hall of Fame is usually littered with obstacles, naysayers, haters and doubters. Like Judas, some of them are close enough to dip with you then turn around and KISS you. They’d rather see you in the “Hall of Failure.” However, we must LEARN from our failures and not LIVE in our failures. Failure is a great teacher, preacher, and motivator, but it is a terrible landlord! (TRUTH!) We must learn the LESSON…but keep on PRESSIN’ without STRESSIN!

Here are four lessons I’ve learned about failure:

Failure does not make YOU a failure.

Many people feel that just because they have failed, that makes them a failure. Nothing could be further from the TRUTH. You may have made a mistake, but that does not make you a mistake. When we understand the difference between experiencing failure and being a failure, it opens the door to success. Many people never succeed because they are too afraid to fail. When you realize that failure is NOT who you are, you are free to fail – which, paradoxically, means that you are free to succeed.

Failure is the INCUBATOR of INNOVATION.

The greatest ideas and inventions often are a direct result of failure. Failure helps us to focus so that we don’t make the same mistakes over and over again. I remember being beat for a touchdown by Art Monk early in my career. I was backed off of him about 8 yards and playing cautiously. He ran a stop and go, and I didn’t even look back because I knew it was 6. When I got to the sideline my coach asked me what happened. All I could say was “He got me.” But after I said that, I immediately said to myself “If he get me again it would have to be my way. I’m gonna ‘bump and run’ till the cows come home.” The rest is history. Sometimes in life, we’ve got to be willing to bump and run.

Failure points you in the DIRECTION of your DESTINATION.

Failure is like your own personal GPS. It lets you know when you’ve made a wrong turn and helps recalculate your route so you can get back on track. The problem comes when we think we know better than the GPS and continue traveling down the wrong road. We must learn to listen to our failures because they have a lot to tell us. Sometimes we have to change direction in order to make it to our destination. I had to change direction over 10 years ago and walk with God and not the enemy because where I was headed wasn’t a good place…and I had a lot of people following me. Publicly I was a success, but privately I struggled. Be careful who you choose to follow and where they’re leading you.

Failure is NOT forever.

Failure is a temporary stop – not a permanent sojourn. For my race fans, failure is like a pit stop in NASCAR. When a driver has to “pit” it seems like it’s a failure. He could be leading the race at the time, but when he pits, all the other drivers pass him. He loses his place in the race – but it’s only temporary. While he is seemingly falling behind, or failing, in the race, the driver is refueling. He may even change his BRIDGESTONE tires (I had to include that – you’ll see soon). The driver uses the temporary “failure” of the pit stop to get what he needs to succeed. It is important for us in the long race of life that we use the temporary pit stops of failure to refuel, refocus, and reevaluate our lives so we can get what we need to succeed. They key is to not stay in the “pits” too long. All drivers have to pit at some point. We all fail at some point, but the race is often won by the person who can get out of the pit the fastest.

Learn from your failures, and you’ll be able to teach others how to succeed! That way, failure becomes the gift…that keeps on giving!

I thought this was a great blog read and thought I would share it with you all!  We at the Frei Team are wishing you the best as we enter 2012 and are hoping that we can all overcome failures to make our dreams become a reality!