In the central Valley of California including San Joaquin and Stanislaus and Merced counties I have found an interesting trend amoung the expired and withdrawn listings I am calling. What is it, you ask? Probably one third of those I spoke with have decided to rent their underwater properties.
That concerns me for a couple of reason:
1. They owe more than the property is worth....for how long? 10-15 years?! A little scarry..a lot scarry!!
2. The rent may or may not make all of the payment now. What about vacancy?
3.And here's the most important:
a. the HOMEOWNER RECOVERY ACT which protects sellers freom a tax problem under certain circumstances on the personal residence runs out Oct of 2012. While sellers may still be considered owner occupants by the IRS after a year of being out of the home...what happens if the seller is forced to short sale AFTER Oct 2012...no protection.
b. Also, SB581 in California cureently says no deficiency on any loan doing a short sale right now. What if that law and the protection under it changes during the next few years?
I am not trying to be a doomssayer, but I do want to be sure people understand what ramifications could be if they wait too long to take care of their situations.
Please do not assume anything right now. Find out what your real options are and what your real issues could be. I will be happy to give a free consult to anyone so we can look at it all together. The financial health of your family and your future could be at stake. Do the right thing. Do your homework.
Be well.
