Short Sales | Heise & Heise, LLP

From FSBO to Short Sale in Baltimore County

June 18, 2020 by heiseheisellp Leave a Comment

baltimore fsbo to short sale client We recently handled a matter where a landlord passed away and the tenant was interested in purchasing the Baltimore County property from the personal representative of the landlord’s estate. We were engaged to prepare the contract for the tenant as a for sale by owner transaction. After the tenant’s lender received the appraisal it became clear the contract sales price was $30,000.00 higher than the value of the property. The problem here is that the sales price was dictated by the funds that were necessary to satisfy the landlord’s existing mortgage. What do we do here to salvage the transaction and get the buyer in the home?

Fortunately, the principal real estate attorney at Baltimore-based Heise & Heise, LLP is also an associate real estate broker with Douglas Realty. We were able to list the property for sale as a short sale, market it, and ultimately write a contract for the tenant. Through the firm, we handled the short sale for the landlord’s personal representative, negotiated a sales price that was $30,000.00 less than the original sales price and obtained a $5,400.00 credit for the tenant.

The landlord’s personal representative was able to benefit from a full waiver of deficiency and release of lien. For added convenience, we also introduced the tenant to a local Baltimore-based title company offering some of the best rates around and has a great deal of experience handling Baltimore short sale transactions.

All of the parties appreciated the convenience of such a streamlined process with all services offered through one central office. If you are experiencing a similar situation please call our team of Baltimore real estate attorney’s at (410) 394-9504 us so we can discuss how we can help and the services we provide.

How the CARES Act Can Help Baltimore Homeowners

June 8, 2020 by heiseheisellp Leave a Comment

CARES Act short sale home in Maryland We recently brought on a few short sale clients in the Baltimore, MD area who purchased properties just before the Great Recession of 2007-2009. These clients saw the value of their properties drop drastically once the recession hit and did not seen the values recover. Some owners continued to occupy the properties as their principal residence while others rented out the properties and were left paying any shortgage out of pocket and suffering losses month-after-month.

The current housing climate caused by the Covid pandemic presents a unique opportunity for these property owners to divest themselves of a huge liability, while minimizing the consequences to their credit score. How so? The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires the lenders to report to the credit bureaus that the borrowers are current on their loan or account if the homeowners are:

current on their mortgage;
enter into a forebearance or other accomodation with their lender (allowing them to suspend payments)
and are meeting the terms of the agreement

How would this look? Let’s run out a scenario for context. A property owner has a former principal residence that is underwater by $100,000.00. S/he purchased another home and is renting out the former residence. The rent coming in does not cover the full mortgage payment and the owner is paying $500.00 monthly to cover the shortage. S/he could enter into a forebearance agreement with the lender, negotiate a 4-6 month suspension of payments, list the property as a short sale and have the property sold before the forebearance period expires. The lender would be required to report that the loan is current during the marketing period while no payments are being made.

Additionally, where a loan is already in default some lenders are willing to suspend negative credit reporting. How this is handled varies from lender to lender, but the key it to contact the lender and work out an arrangement.

If you have a client nurturing along a property with negative equity and is current on their mortgage, or is in default, now is the time to reach out and encourage them to enter into a forebearance or other agreement, list the property as a short sale, skip 4-6 months of payments, sell the property and not take a hit to their credit score for the skipped payments.

Please call the experienced team of Baltimore, MD real estate lawyers at Heise & Heise at (410) 394-9504 for more details on how we might be able to assist you.

Tax Relief for Short Sales in Baltimore

March 8, 2018 by heiseheisellp Leave a Comment

Depending on how closely you follow what is going on in Washington, you may or may not be aware that Congress recently passed the Bipartisan Budget Act of 2018. Even among those of you with your finger on the political pulse, it can be easy to overlook some smaller items rolled up in these types of complex Congressional deals. Among the many provisions included in this bill, the one we want to draw your attention to involves real estate short sales in Baltimore, MD and nationwide.

If you short sold your principal residence in 2017, and the lender forgave the debt, you will not need to include the forgiven debt in your gross income. Additionally, if you entered into a contract in 2017 to sell your principal residence and it does not end up settling until 2018, you will be able to benefit from this provision. Find additional details on the IRS website: http://bit.ly/2HSefC8

This is huge news and will provide tax savings for many hard working people!

Have questions about how this new short sale tax law might impact you? Contact us today for a free consult.

Are Short Sales Slowing Down in Baltimore?

December 14, 2017 by heiseheisellp Leave a Comment

short sales slowing down in baltimore, md Heise & Heise, LLP is a Baltimore-based law firm that has been assisting property owners in Maryland and the District of Columbia with short sales since 2010. Over the past twelve months, we have noticed a slowing in the number of short sale inquiries and short sale clients at our office. The biggest driver of the reduced number of inquiries and engagements is the improving local real estate market and the strong appreciation in home values. These two factors have made a short sale less of a necessity for many people. We can candidly say that we have never been happier to have less business as this means that many people are enjoying a healthier financial condition.

However, short sales will continue to have a roll in some peoples’ lives for the foreseeable future for a variety of reasons.

Reasons for a Short Sale in Baltimore

loss of employment
job relocation
change of marital status
death in the family
unexpected health issues

Unfortunately, those individuals experiencing one of the hardships above do not have the luxury of waiting for continued appreciation to erase any prior reduction in value their home. If you are experiencing any of the hardships above and are considering letting your property go in foreclosure or declaring bankruptcy, please call us at (410) 394-9504 or contact our firm before doing so for a free consultation.

Life After A Short Sale in Baltimore

October 19, 2017 by heiseheisellp Leave a Comment

What happens after a short sale closes?

Here at Heise & Heise, LLP, one of the few Baltimore law firms concentrating in short sales, we have been thinking that our current short sale clients might be interested in that very question. We reached out to ten former clients who successfully completed short sales from 2012 through 2015 and asked if they would be willing to take part in a short interview. Those that responded did so because they felt very strongly about helping out those who are just beginning their own short sale journey and wanted to share their experiences. What they shared with us was very interesting and is explored in detail below.

What happens to my credit after a short sale?

Most of our former clients indicated that at the completion of the short sale, their credit scores hit lows in the mid-400s to low-500s which would be considered a bad or poor, credit score by industry standards. All of those interviewed who recently checked their credit scores informed us that their scores are now good or excellent with most falling into the good category of 700-749. The most exciting example was the client whose credit score bottomed out in the low-400s at the completion of the short sale and has since rebounded to the mid-700s in just two years! On average the rehabilitation of credit scores took 12 to 18 months.

Will I be able to purchase a new home or car after a short sale?

Over 70% of those interviewed informed us that they have purchased a new home since they concluded their short sale. The financing placed for these new home purchases has varied from commercial loans to FHA loans with competitive interest rates. The remaining individuals interviewed are considering home purchases but are not quite ready to take that step. An interesting side note is that all of those interviewed have purchased new cars since the conclusion of their short sales.

Will I have to pay anything to the lender as part of the short sale?

All of the former clients with whom we spoke confirmed that they did not have to contribute to the loss that the lender(s) experienced as part of the short sale. Additionally, most of these individuals were able to benefit from the since expired Debt Forgiveness and Relief Act and no taxes were owed on the forgiven debt. While this act has not been renewed most clients pursuing a short sale presently may avail themselves of other exemptions provided by the Internal Revenue Code to escape tax liability.

Were there any other interesting facts to share?

Our former clients also had a few tips and observations that we feel are worth sharing. One person went through a second short sale using a firm other than Heise & Heise, LLP and indicated that the level of service he received from that firm was subpar by comparison. He emphasized that a person pursuing a short sale should build a strong and reliable team comprised of a lawyer, accountant, and real estate agent to assist in navigating the complexities and pitfalls inherent in a short sale.

This same person was able to get all negative references associated with the short sale removed from his credit file by continually appealing the references and demanding proof of the debt from the lender. After experiencing the lender’s inefficiencies throughout the short sale process this clever person figured out a way to capitalize on the lender’s dysfunction to his benefit.

Another former client wondered why anyone would just sit back and let their house be foreclosed upon and have that activity on their credit report rather than engaging in a short sale. One person expressed his opinion that he felt it was much easier to rehabilitate his overall financial situation by engaging in a short sale rather than declaring bankruptcy.

One word we kept hearing from our former clients in these interviews was a relief, the relief they felt from the pressure of collection calls, relief from the uncertainty of what would happen to their future, and relief that with our assistance they were able to complete their short sale putting an unfortunate experience behind them.

If you are looking for a Baltimore real estate attorney or know anyone considering a short sale, contact us today. We look forward to helping our future clients achieve the same relief we provided to our former short sale real estate clients.