I’ve stopped making payments. Do I have time to short sell before foreclosure?

Even if it’s late, it may not be too late.

If you’ve stopped making payments, you’re right to wonder if there’s time to short sell your San Diego home before foreclosure.

The answer is probably yes, as long as you list it at the right price and with an agent who is skilled in handling short sales.

In most cases, you’ll have 60 to 90 days from the time of your last payment before your lender begins the foreclosure process.

The first step in foreclosure is recording the Notice of Default.

By law, you have at least 111 days from recording of the Notice of Default until the trustees sale. However, home loans that were made between January 1, 2003 and December 31, 2007 have an additional 30 days, during which the lender is required to make a “best effort” to contact you for the purpose of exploring ways to avoid the foreclosure.

The Notice of Default can only be filed after this 30 day period, and the lender must attest to having made contact or having made a best effort to make contact.

Thus, if your mortgage loan was made between January 1, 2003 and December 31, 2007, you have at least 141 days.

Here’s the legal timeline of events that must happen before a foreclosure is final:

Within 10 days after recordation, the lender must send a copy of the Notice of Default to the borrower by registered or certified mail.

At some time between day 86 and day 91, the lender must record the Notice of Trustee’s Sale. This notice sets forth the date, time, and place of the Sale – which cannot be sooner than 20 days after recording. This notice must include the total amount of the unpaid balance and reasonably estimated costs, expenses, and advances at the time of the initial publication of the Notice.

Every effort must be made to notify the borrower of the impending sale. After the notice is recorded it must be posted on the property, published for 3 consecutive weeks in a newspaper of general circulation, and mailed to the borrower by registered or certified mail as well as by first class mail.

Day 105 – or 135 if the loan is subject to the 30 day contact period – is the last day for the borrower to cure the default and reinstate the loan by catching up all back payments and paying the related fees, late charges, etc.

Note that this is 5 days prior to the trustees sale. If that sale is postponed – which is relatively common – then the date to cure the default is also postponed to a date which is 5 days prior to the trustees sale.

Note also that the borrower has the right to redeem the property by paying the entire balance due, including fees, right up until bidding begins at the trustees sale.

If you have a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego and believe you should short sell, call 619-929-1413 or write td@tomdunlap.com.

We’ve created systems for presenting our short sale packages and we’ve developed relationships with the banks that allow our San Diego short sale requests to be processed faster than most, but it’s still best to have as much time as possible.

P.S. You may have read stories about San Diego homeowners who stopped making payments and stayed in their homes for more than a year before foreclosure. Those stories are true, but they are not a guarantee. It’s safest to proceed as if events will be carried out according to the legal timeline.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Does your short sale real estate agent know how to prepare a HUD-1?

In a standard real estate transaction, the HUD-1, also called a settlement statement, doesn’t appear until just prior to closing.

This document, usually prepared by the escrow officer, shows the financial accounting on both sides of a real estate transaction. It lists all the costs on both the buyer and seller sides, and is used as a guide in dispersing funds after the sale has closed.

But that’s not the case for a HUD-1 in a short sale.

The HUD-1 has to be prepared and submitted to the lender’s asset manager along with the short sale request. Why? Because a short sale lender won’t agree to the selling price until they know exactly how many dollars they will net from the sale.

Unfortunately, many San Diego real estate agents don’t have the experience to accurately anticipate all the costs that can crop up during escrow – and don’t know how to prepare a HUD-1 for a short sale even if they did. After all, the HUD-1 preparation isn’t part of their duties in a non-distressed sale.

That lack of knowledge often leads to the failure of the short sale.

If the HUD-1 is improperly prepared and unexpected costs crop up after the lender has agreed to a short sale, the transaction will halt and go right back to the negotiating stage.

That means another long delay and often leads the buyer to cancel the contract. Even worse, it can add enough time for a pending foreclosure to be finalized.

The HUD-1 is just one of the reasons why San Diego home sellers should always choose a listing agent with the experience and know-how to handle a short sale. If an agent doesn’t understand it and doesn’t follow the correct procedure, attempting a short sale can end in foreclosure.

We do understand San Diego short sales and we do know how to prepare a HUD-1 for a short sale. In fact, we’ve successfully closed 98% of the short sale listings we’ve taken in the past 9 years.

San Diego short sales aren’t fast or easy. But they’re not impossible, and they don’t need to take a year to close. You just need an experienced agent who knows how to deal with the banks in a manner that gains their cooperation.

So if you’re thinking of short selling a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego, get in touch. We’ll be glad to explain how a San Diego short sale works and answer all your questions.

To reach us just call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

A Dozen Tips to set your San Diego home above the competition

When potential buyers view your San Diego home, you want them to recognize and fall in love with all the features and benefits it has to offer. Thus, you need to remove the distractions that could prevent them from really seeing your home.

Following these tips will help you present your home in the best possible light – and set it above the competition.

First, Prepare the House for Sale

1. Begin with ensuring curb appeal, since it’s the first impression buyers have when they arrive to tour the house.

  • Make sure the yard is free of toys or yard equipment – and stash the trash/recycling containers.
  • Pick up the flyers the wind blew in.
  • Sweep the walk and scrub the driveway.
  • If you have a fence, make sure it’s in good repair.
  • Plant colorful flowers – in the earth or in well-placed containers.
  • Freshen the paint on the front door.

2. De- clutter and de-personalize everywhere, including the attic, basement, and garage. Home buyers are looking for space, and if yours is filled with “stuff” you aren’t using or too much furniture, the house will appear smaller.

Now is the time to put seasonal or seldom used equipment in storage, to donate unused clothing, toys, kitchen ware, and small appliances, and pack your collections for your eventual move. If your rooms are cramped from too much furniture, move some of it to storage as well.

Remember that buyers will look inside closets and cupboards – so de-clutter them as well.

Replace most family photos with scenics or still-lifes. Pack your trophies and awards, and remove the kids’ drawings, etc. from the refrigerator. You want your buyers to focus on the house and visualize themselves living there. You don’t want them examining your photos to see if they know you or looking at your personal items to speculate on your lifestyle, your religion, or your political affiliations.

3. Clean, clean, and clean.

  • Start with the doors, inside and out. Then move on to walls and cabinets where fingerprints like to leave their mark.
  • Scrub kitchen walls, counter-tops, and cabinet fronts to remove cooking residue.
  • Clean all light fixtures to let more light through.
  • Shampoo the carpets and scrub the hard floors.
  • If you smoke, also shampoo the upholstered furniture and have the drapes cleaned. Wash your bedspreads. (No, they aren’t staying, but you don’t want odor to distract.)
  • Clean the bathroom until every inch sparkles.
  • Wash every window, inside and out.
  • If walls and ceilings look tired, repaint

4. Make repairs
Torn screens, dripping faucets, sticking doors, and loose doorknobs give the impression that your home has not been well maintained. Now is the time to handle all those little chores you’ve been putting off.

And of course, if you have broken glass, a door or wall with a hole, a loose tread on the stairs, or any similar damage, you need to make the repairs before a potential buyer sees the house.

5. Spruce up the kitchen and bath.
These are the two most important rooms in the house for most home buyers, so take extra time with them. If they’re looking dated, consider adding modern door pulls, lighting fixtures, and/or faucets. Hang fresh, colorful towels when buyers are expected.

6. Bedrooms should look restful and inviting.
Consider adding new bedspreads and plump pillows. Move the exercise equipment out and add flowers. If your closets are overflowing, move clothing you don’t wear regularly to a storage unit.

Before buyers arrive…

7. Do a quick run-through to make sure beds are made, dishes are done, clothes are hung up or in the laundry hamper, and the trash (and litter box, if you have one) has been emptied. Pick up and put away toys, newspapers, curling irons, toiletries, etc.

8. Put away all personal correspondence and bills, and if you have medications either take them with you or store them in a locked cabinet, along with other valuables.

9. Buyers love light, so open drapes and shades and turn on lights. At night, make sure all outdoor lighting is turned on.

10. Leave the house during the showing. Buyers are uncomfortable taking time to look when the owners are present. Let them have uninterrupted time to appreciate all your home has to offer. If you happen to meet the agent and buyers as you’re leaving, say a pleasant hello and be on your way. Direct all questions to your agent.

Remaining in the house during a showing is one of the top mistakes San Diego home sellers make.

11. If you have pets… take them with you or put them in an outdoor kennel when you leave the house. Pets are a distraction to some and a put-off to others. Some buyers will pay more attention to the pets than the house. In contrast, some won’t even enter a house with a dog or a cat inside – either because of allergies or out of fear. In addition, agents and buyers are known to leave doors open – posing an escape/safety hazard to your pets.

A cautionary warning:

12. For your safety and your family’s safety: Show your home by appointment only.

Don’t open the door to anyone who doesn’t have an appointment, even if they say they’re a REALTOR®. If they’re legitimate, they’ll call your agent to make arrangements.

Be sure your children know this as well.

When you get an offer…

When we call to say you have an offer, make time to sit down with us and understand the entire offer. There’s always more to an offer than the price.

If you don’t understand any of the contingencies or concessions that the buyer is asking for, ask questions. It’s our job to help you respond appropriately and then to negotiate both the price and terms to your satisfaction.

Don’t take too long in answering. Your buyer may be considering other homes and will move on if you fail to respond in a timely manner.

What does it cost to list my San Diego home as a short sale?

Have you been approached by a real estate agent offering to put your San Diego home on the market as a short sale – for a fee?

Unfortunately, many have. And it shouldn’t have happened.

The truth is, San Diego homeowners who enter in to the short sale of a home don’t have to pay a dime. Reputable agents don’t charge a listing fee, and the selling costs, including commissions, are all paid by the mortgage lender from the proceeds of the sale.

The only costs that should be associated with the sale are those the homeowner incurs as a part of getting the home ready for market. For instance, you might pay to have the carpets shampooed or invest in some new paint to brighten up the kitchen.

Why would the bank pay your selling costs?

For one thing, they know that in most cases the homeowners don’t have the required funds. Secondly, the costs to the bank are far less than they’d pay as the result of a foreclosure.

With a foreclosure, they have to pay attorney fees and property preservation fees in addition to the real estate agent’s commission, title insurance fees, etc. Then, because it’s a foreclosure, the selling price will probably be lower. According to a study by the Boston Consulting Group, a short sale reduced a lender’s losses by 20% over a foreclosure.

Thus, paying the short sale agent is simply a good business decision on the part of the bank.

The good news is: Even though it costs you nothing, you can still obtain expert help for the short sale of your San Diego home.

We have a 98% success record in selling and closing the short sales we list. So if you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego and are considering a short sale, get in touch.

To reach us, call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Should You Keep Making Payments on an Underwater San Diego Home?

Are you among the hundreds of San Diego homeowners who purchased your home at or near the top of the market – and now, even though prices are rising, owe far more than the home could bring in a sale?

Were you led to believe your home would go up in value, and that it would be easy to refinance out of your adjustable rate mortgage before the interest rate reset? Even if you have a fixed rate mortgage, you’re probably frustrated because your house is “underwater” so you can’t refinance into today’s low rates.

Why are you continuing to pay?

If you’re in this situation, you may be asking yourself why you’re continuing to make payments when it could be years before your home is again worth it’s purchase price – or even its mortgage loan balance.

You’d probably like to keep the home – but pay less.

You’d probably love to get a loan modification with a principal reduction and a fair interest rate – so you can make payments on your home based on its value in today’s market. Unfortunately, banks aren’t interested in making principal balance reductions.

We know, there’s some talk of principal reductions in the new news coming out of Washington. At this point, it’s just talk, and it only applies to a handful of borrowers.

Meanwhile, banks resist principal reductions because they have to be written off on the books immediately. That hurts the company’s reported earnings – and reduces the CEO’s ability to get a bonus at the end of the year. It could even threaten his job.

An interest rate reduction (which is temporary) shows a much smaller loss – and thus makes a much smaller impact on the CEO’s bonus.

In addition, experience has shown us that most loan modification attempts fail – sometimes after causing financial devastation for the homeowner. For many, foreclosure is the final result of a loan modification attempt.

Offering your home as a San Diego short sale is a better plan.

First, when you short sell, neither your first nor your second lien holder can come after you for a deficiency judgment. If you let the house go into foreclosure, that second lien holder can demand payment.

Second, a short sale has a smaller impact on your future. Your credit scores aren’t as severely damaged, and you’ll be eligible for a new mortgage loan in as little as 2 to 3 years. After a foreclosure, you’ll wait 5 to 8 years.

Now that second lien holders can’t demand deficiency payments, it takes a strong negotiator to get them to agree to a short sale. There’s no doubt that short sales demand a greater commitment and greater expertise from your REALTOR®, which is why you hear so many stories about the difficulties of closing short sales – and why you need expert assistance.

As San Diego short sale specialists, we have developed methods for approaching the banks so that our clients can sell short, even with second mortgages, and even when they have both assets and income. In fact, we have a 98% success record in closing the short sales we list.

Every short sale situation is different. If you’d like specific answers that relate to your situation, call 619-929-1413 or write td@tomdunlap.com.

We’ll be glad to explain in detail how the San Diego short sale process works, and to answer all of your questions. So contact us today.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What Would Dave and Suze Advise About a San Diego Short Sale?

You probably know Dave and Suze from TV and radio. Dave Ramsey’s popular radio program answers questions from callers about how to get out of debt, and stay out.

Suze Orman wrote “The Courage to Be Rich,” and other books on personal finance. She also has a popular TV show where she answers people’s questions on how to manage their finances.

Dave and Suze do recommend short sales. They also recommend getting out of debt as quickly as you can. They see no point in using up a large percentage of your income on interest payments. Their advice is almost always “If you can’t pay cash for it, don’t buy it.”

In fact, Dave is such a proponent of the debt free, simple life that one of his favorite sayings is: “You don’t need to see the inside of a restaurant unless you are working there.”

But there’s one more reason why you should short sale your home rather than letting it go into foreclosure.

That reason is called deficiency.

A deficiency is the difference between what you owed on the mortgage and how much money the bank realized after re-selling the home and deducting all the costs of the sale.

If all you have is a first mortgage, you don’t have to worry. But if you’ve taken out a second mortgage – such as a home equity line of credit – a foreclosure could spell financial disaster.

In a short sale, neither lender can come after you for a deficiency. In a foreclosure, the holder of your second mortgage can sue for a deficiency judgment – and that’s not something you want.

Finally, a short sale is easier on your credit scores, and your future ability to own a home. After a short sale, you’ll be eligible for a new mortgage loan in as little as 2 years. If you allow your San Diego home to go into foreclosure, it will be 5 to 7 years before you can buy another home.

Should you short sale or shouldn’t you?

If you own an upside down home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego, call 619-929-1413 or write td@tomdunlap.com to get advice from the Tom Dunlap – San Diego’s top short sale specialist.

He’ll be happy to explain how short sales work and to answer all your questions. Tom and his team have helped hundreds of other San Diego homeowners avoid foreclosure – and they’d be pleased to help you.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

San Diego Real Estate Market Trends

The television tells you about nation-wide real estate market trends. But as we all know, some markets are picking up rapidly while others are still slipping.

Our market trends reports cover only San Diego County… and that’s more help than national statistics.

However… it pays to remember that trends can vary even from one San Diego neighborhood to another. What’s true in South Park may be false in North Park. So read the reports, get a general idea of how things are going, then give us a call. We’ll be glad to answer your questions.
To access the comprehensive Market Trends reports, click on your area of San Diego County below:

You can also create your own reports on my Market Reports page.

For specific neighborhood information or to find out what your home is worth, please contact us with the neighborhood or your address and we’ll create a personalized Comparative Market Analysis (CMA) for you.
To discuss trends and ask questions about the neighborhoods that interest you, call 619-929-1413 or write td@tomdunlap.com.

If I short sell my home, will I have to pay the property taxes that are in arrears?

No, when you short sale your house, you won’t be expected or asked to pay the San Diego property taxes.

This is one of the costs that the lender will pay in the course of the short sale.

Property taxes are a first lien and have to be paid – whether the homeowner does a short sale or the bank forecloses. They can’t be negotiated away.

The fact that they are a first lien is why most lenders require home buyers to agree to setting up an escrow account as part of the monthly mortgage payment. When homeowners deposit 1/12 of the taxes each month along with their mortgage payment, the money is there when the tax bill is due. And, when the bank mails the payment, they know it’s been done. Most also want to collect monthly for homeowner’s insurance, in order to assure that “their asset” is covered.

We have not yet run into a San Diego short sale in which the bank required the homeowner to pay the property taxes – even if they were 2 or 3 years in arrears.

If you’ve already fallen behind, there’s a very good reason to call us today.

  • We have a 98% success record in successfully closing our San Diego area short sales. But even we can’t help if you wait until the week before a foreclosure becomes final.

If you’re in distress over a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego, we can help you short sale your house and avoid foreclosure.

To reach us, call 619-929-1413 or write td@tomdunlap.com. We’ll be happy to answer all your questions and to explain the short sale process.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What About Strategic Default?

Considering Strategic Default of your San Diego Real Estate?

Strategic default is often a sound financial decision. And in almost every case, selling as a San Diego short sale is a better decision than simply letting the property go into foreclosure.

Thousands of San Diego property owners have come to the realization that continuing to make payments on their homes, second homes, and residential rental properties might not be a wise business decision. And, there are times when sound business decisions should outrank other considerations.

Strategic default is generally thought of as the decision by a homeowner or investor to let a property go into foreclosure, whether or not they have the ability to continue making payments. But contrary to what many believe, such homeowners can also choose the short sale method of strategic default – and with far better consequences.

Some San Diego property owners have both assets and income – they are able to continue making the payments. But for many, the property has lost so much value that continuing to service the debt does not make good financial sense.

In the long run, making the effort to short sell is worthwhile. Here are a few of the reasons why:

  • A foreclosure is far more damaging to your credit scores – and for a longer time
  • A foreclosure will prevent you from securing some kinds of employment
  • After a foreclosure, you’ll be ineligible for a new home mortgage loan for 5 to 7 years
  • After a short sale, you’ll be able to get a new mortgage loan after only 3 years

Some San Diego homeowners are now making monthly mortgage payments that are roughly double what their next door neighbors are paying for a similar home purchased recently. Worse, their homes are often worth less than the balance they owe on their mortgages.

No two situations are exactly alike. When you want advice that applies to your specific situation, call 619-929-1413 or write td@tomdunlap.com to request a no-obligation consultation.

Some rental property owners should also consider a strategic short sale.

Faced with competition from investors who purchased in the last few months, many are being forced to lower their rents. Properties that were once San Diego income earners are now a monthly drain on bank accounts. Owners are writing checks to make up the difference between rental income and the mortgage payments, taxes, insurances, HOA fees, and special assessments.

For some it means using every last dollar and forgetting about such things as saving for retirement or college tuition for the kids. For those whose income stream has been severely reduced, it could mean going a little farther into debt each month on credit card accounts, just to keep food on the table. And, making those payments could bring a serious and negative result in their future and their loved ones’ futures.

It might not make sense to risk all of that for a property that will not cash flow for many years.

Thus, some rental property owners as well as San Diego homeowners are considering “Strategic Default” as a wise business decision made to protect themselves and/or their families from future financial devastation.

In spite of what you may have read, banks do allow short sales on investment properties and second homes as well as primary residences, and they do allow short sales for owners who have both income and assets.

And, while inexperienced real estate agents will tell you it can’t be done, we have negotiated short sales involving debts of $100,000 and up to $4 million.

If you’re considering a Strategic Default Short Sale in San Diego County, call 619-929-1413 or write td@tomdunlap.com to get advice from the short sale expert who says “Yes, we can” – and does it.

Every San Diego short sale, and especially every high dollar short sale, is unique and requires a unique strategy and approach. One size definitely does not fit all. And that’s probably why you’ve heard so many stories of failure.

Perhaps the biggest mistake anyone can make when attempting to short sale their property is choosing an inexperienced agent. And even choosing an agent with success in short selling low to moderately priced San Diego homes can result in failure with a luxury home, a second home, or an investment property.

We are San Diego short sale specialists. Unlike many REALTORS®, we don’t subcontract out our short sale negotiations, but handle all negotiations in-house. Through our experience in handling hundreds of short sales, we have developed effective processes for dealing with high dollar San Diego short sales. As a result, we have a 98% success rate.

Preparation, Presentation, and Skilled Negotiation Lead to Strategic Short Sale Success

When the request is presented properly and negotiated skillfully, bank negotiators usually conclude that allowing a San Diego short sale is the best business decision for them, as well as for the property owner. And of course it is. Foreclosure is not without cost to the bank, and a vacant home requires maintenance and upkeep. Then, it sells for a lower price than an occupied home.

During the past 9 years of handling short sales, we’ve learned that each bank has a different way of handling short sales. Some are aggressive on certain issues and not on others. Our knowledge of these differences is one reason why we succeed in closing San Diego short sales while others fail.

By knowing their policies and procedures, and by knowing who to contact at each bank, we can present the picture in a manner that leads to “yes.”

If you think a strategic short sale might be the best solution for you, call 619-929-1413 or write td@tomdunlap.com to tell us your situation and send us your questions. We’ll be happy to explain the short sale process, answer your questions, and let you know what information will be required from you in order to submit a winning request package to your bank – or banks.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

When should I consider a San Diego short sale?

As a San Diego homeowner, When should I consider a short sale?

If the current market value of your home is less than the balance due on your mortgage you should consider a short sale as soon as you know you will be unable to continue making payments without borrowing from other sources.

If things are tight and you don’t see the light at the end of the tunnel, its time to look at your options.

Don’t wait until a foreclosure is threatened, and don’t use up all your resources and/or borrow from other sources in order to maintain payments on a home that you cannot keep.

An important point to note is that a homeowner seeking to do a short sale must demonstrate that they are unable to continue making payments on the mortgage and that the circumstances that prevent payment were unforeseeable and occurred after the property was purchased.

Although some real estate agents will tell you it can’t be done, homeowners with both income and assets are often allowed to dispose of property through a short sale. Visit our strategic default page for further information.

There are no hard and fast rules, because every short sale situation is different. If you’d like specific answers that relate to your situation, call 619-929-1413 or write td@tomdunlap.com to ask your questions. We’ll be happy to answer them and to explain the short sale process.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What Are The Alternatives to Foreclosure?

What can I do if I want to avoid foreclosure?

Walking away and letting a home go into foreclosure will destroy your credit rating for many years – and even longer if you get stuck in a zombie foreclosure. Let’s take a look at the other options for San Diego homeowners:

  1. Sign a deed-in lieu of foreclosure.
  2. Work with the lenders for a loan modification
  3. If you have an FHA loan and are unemployed, apply for forbearance
  4. Offer your home as a short sale

A Deed-in-lieu – This is a document that essentially hands your San Diego house back to the bank without going through the foreclosure process. Your bank may or may not allow you to do it, but even if they do, it’s not a good move. The effect on your credit rating will be the same as a foreclosure. Worse, if you have a non-purchase money second mortgage, the bank can come back on you for a deficiency.

Loan Modifications:
Although highly touted as the answer to the mortgage crisis, in reality few have been helped and many have been harmed.

In theory, the lender would alter your interest rate and lower your payments for a set time, allowing you some “breathing room” in which to get your financial life back in order.

In practice, thousands of homeowners have been “strung along” for months, only to be rejected – even after complying with all the terms during a trial period.

That doesn’t mean you might not be successful, and we on the San Diego Pro Team will be happy to explain the process to you and help you determine whether the bank would consider your application for modification. We have the same software the banks use, and we’ll give you the results instantly.

Forbearance: This is a wonderful tool for anyone who has an FHA loan and is unemployed. The bank simply suspends your obligation to make payments for a year. The unpaid interest is tacked on to the end of the loan.

During the forbearance period you are free to market the house for sale – without the threat of an impending foreclosure. This is true whether you have equity or need to short sale your house.

A Short Sale: Although the current market value of the house is less than the balance due on the mortgage or mortgages, the bank approves the sale and accepts the proceeds as payment in full.

Here in California the first mortgage and any secondary liens are wiped out by a short sale. After foreclosure, your secondary lien holders can obtain a judgment against you for their unpaid balance.

The short sale of a home does require extensive negotiation with the bank’s asset manager, who might be more inclined to force the homeowner into foreclosure. That’s why homeowners need an experienced agent at their side. We of the Tom Dunlap Team have the experience – and an enviable record of success in getting our short sale listings sold and closed.

Note that in a San Diego short sale, all costs of selling, agent fees, unpaid taxes, etc. are paid by the lender from the proceeds of the sale. When you short sale a San Diego home, you pay no costs beyond the expense of keeping the house ready to show to potential buyers.

What are the Odds of Success on a San Diego Short Sale?

When you have the right assistance, the odds are very good.

The successful short sale of a home begins with knowing each lender’s preferences and how to present the short sale package so that it gets timely and favorable attention. Then, it depends upon negotiating skill and persistence.

Tom Dunlap  is San Diego’s leading short sales specialist. He has negotiated thousands of real estate transactions and has a 98% success rate when negotiating with lenders on a short sale.

It’s no wonder – he not only has more than 25 years of experience in helping San Diego homeowners, he’s also an attorney and holds a Master’s Degree in Negotiation.

If you have questions about loan modifications, forbearance applications, or short sales – or if you’d just like to discuss the San Diego real estate market – please get in touch.

Call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What possible tax issues might I have with a short sale?

The income tax issue resolves around forgiven debt in the short sale of a home.

Any time a debt is forgiven, the creditor will generate a “debt forgiveness” 1099 for the debtor. This is true whether the forgiven debt is unsecured credit or a mortgage loan.

The IRS requires all financial institutions to generate a debt forgiveness 1099 regardless of whether the taxpayer will be required to pay Federal Income Tax on the forgiven debt. So when you receive this document, don’t panic.

In general, if the debt was a home mortgage, it’s likely that you won’t owe the tax. However, there are qualifications in the law, so don’t assume anything.

Following is an overview of the rules.

Please do read the indicated IRS publications and seek specific advice from your own tax accountant or attorney.

Tax consequences of the short sale of your primary residence under Internal Revenue Code Section 121:

The San Diego short sale homeowner can find some basic information on the Mortgage Debt Relief act of 2007 at IRS.gov. This Act was set to expire on December 31, 2012, but has been extended several times. It now expires on December 31, 2016. Will it be extended again? We don’t know, but judging from past performance, we may not find out until late into 2017.

Generally, the Act allows taxpayers to exclude income from the discharge of debt on their principal residence. You will be required to acknowledge the 1099 on your Federal Tax Return, but will then file another form to offset the liability.

Debt reduced through mortgage restructuring, debt forgiven during the short sale of a home, and mortgage debt forgiven in connection with a foreclosure all qualify for the relief.

Short sale on San Diego rental property

IRS Form 982 is used to reduce the liability of a tax attributed to the sale of a property that results in a loss. See Section 108 of the IRC. The seller of a rental property needs to be prepared to use this option to avoid tax liability, if any. Section 108 specifically qualifies real estate for business purposes and paves the way for the tax payer to avoid liability for phantom income associated with rental property.

The second home short sale dilemma

The second home presents a true issue with regard to short sale and tax planning. The borrower who needs to go into a short sale on a second home should seek tax counsel and explore whether the property might be converted into rental property and qualify under the example above for rental properties under Section 108.

The IRS and cancelled debt

For more information on the IRS and cancelled debt, refer to IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions, and Abandonments – specifically the sections on Qualified Real Property Business Indebtedness and Qualified Principal Residence Indebtedness.

Consideration of a short sale does bring about questions… call 619-929-1413 or write td@tomdunlap.com to get specific answers to your short sale questions.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What possible credit issues might I have with a short sale?

No two San Diego homeowners who short sell will experience the same effect on their credit scores.

After the short sale of your home, the consequences with regard to your credit rating are impossible to predict. If anyone tells you otherwise, they are wrong.

As much as we’d all like to make accurate predictions, credit reporting cannot be generalized, and the formulas used by Fair Isaac to create FICO scores are a closely held secret.

We do know that FICO scores are a mathematical assessment of your credit performance over time, combined with a snapshot of your credit use on that date. No two people would have the same snapshot, so each element of a short sale will have a different impact, depending upon the other facts contained in your credit report.

What is clear…

However, after more than 25 years’ experience in working with and observing credit scoring, it looks clear that a short sale and a foreclosure do not compare to each other. A Deed in Lieu or a Foreclosure will, in most cases, always end up with a very harsh result.

When it comes to short sale consequences, the seller in default is more likely to experience a lower credit rating than the seller who succeeds without missing any payments. However, the seller who is not missing payments might not be able to argue that there is any hardship and thus may not be allowed to short sale.

Regardless of whether the homeowner was in default or not, short sale consequences are always less severe than the consequences of a foreclosure.

A recent San Diego Homeowner pointed out that one of the great bonuses to using us for San Diego short sales is that we use the services of one of the nation’s premier credit repair firms. These credit specialists offer pre-short sale counseling to help you avoid mistakes that will further damage your credit.

A credit trap to avoid:

One of the largest single mistakes made by homeowners in distress is waiting to act and amassing unsecured debt in order to keep making payments on the house.

For instance: We had a Rancho Santa Fe resident call us to sell his home as a Short Sale. He had been trying for more than a year to obtain a loan modification and had now been notified that ASC had rejected his request. In the meantime, he had used up his credit limit on three credit cards. He was deeply in debt.

We were able to short sale the house and zero out any liability from his mortgage debt, but he is still faced with hefty balances and payments on three credit cards. Using the cards to their limit harmed his credit scores. If he is unable or unwilling to keep up with the payments, his scores will suffer even more.

The bottom line: If you think you are headed into housing trouble, act early. Save your resources.

The effect on your credit is just one of the many questions and concerns you may have as you contemplate the short sale of your San Diego home. We do have answers, so call 619-929-1413 or write td@tomdunlap.com.

We’ll be glad to discuss your situation, explain the short sale process, and answer your questions.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

How long does a short sale take?

How long does it take a bank to approve a San Diego short sale?

We tell everyone that it will take 90 days from the time of the offer to get an approval from the banks. Sometimes this happens in 60 days. Some banks are more organized than others and can even pull it off in 30 days.

The reason so many San Diego real estate agents will tell you bank approval on the short sale of a home can take 6, 9, or even 12 months or more is that their short sales were not properly presented to the lender’s asset managers.

Each bank has their own real estate short sale process and their own preferences with regard to how a package must be presented. When agents fail to follow those preferences, their short sales are delayed.

We’re experienced in presenting our San Diego short sale packages correctly the first time – so there are no unnecessary delays.

Every short sale situation is different. If you’d like specific answers that relate to your situation, call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Will I be able to buy another home after a San Diego short sale?

The short answer is “Yes, after a San Diego short sale you will be able to purchase another home.”

The big question is “When?” And the answer is: “It depends.”

One of the benefits of a short sale vs a foreclosure is that the time is much shorter.

However, confusion abounds with regard to how long you’ll have to wait before you can apply for a new San Diego home mortgage. Fannie Mae and Freddie Mac each have their own guidelines, as do FHA and VA.

FHA guidelines state that borrowers who were in default on their previous mortgage will not be eligible for a new FHA loan for 3 years. If they were not in default on their home mortgage or any other debt, they may be eligible in 2 years. But… depending upon the circumstances, they “could” be eligible almost immediately.

VA regulations state that you must wait 2 years.

Fannie and Freddie have relaxed their guidelines, dropping the wait time from 4 or 5 years down to 2 years – maybe.

It has been our experience that most people will wait 3 years before being granted a new home mortgage loan of any kind. However, since each person’s situation is unique and the guidelines are filled with “if’s, and’s, and but’s,” you should consult with a reputable mortgage lender to see just where you stand.

The first and most obvious requirement for getting a new San Diego home loan sooner is that your credit is good. If during your short sale you kept your mortgage payments and all other obligations current – and if you have continued to pay all your other obligations on time – you’ll get a new loan sooner.

As with any loan, your debt to income ratios and the stability of your employment will play a part in the decision.

The amount you can pay as a down payment will affect your chances with Fannie Mae and Freddie Mac. Those with a 20% down payment will get a loan sooner. Those with less than 10% down will have a much longer waiting period.

Your reason for the short sale also affects the timing of a new loan. If you can demonstrate that your short sale was the result of circumstances beyond your control, you’ll get a new loan sooner.

The good news is that a short sale will not destroy your chances of owning a San Diego home in the future. You can sell short, regroup, and move on to a brighter future.

We’re short sale specialists, with hundreds of successful short sales to our credit.

We can help you too – but only if you make the first move.

So do it today – call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Is it possible to just walk away?

Yes, it is possible to walk away. Under California’s new laws, when you go through foreclosure, the banks cannot sue you for a deficiency on your first mortgage. However, if you have a second mortgage or a home equity line of credit, they can. And they probably will.

(One of the benefits of a short sale vs a foreclosure is that when you choose to short sale your San Diego house, none of your mortgage lien holders can sue for deficiency.)

However, even if you don’t have a second mortgage, walking away and allowing your house to go into foreclosure is one of the worst possible choices you could make. It should not be done without careful consideration.

The pitfalls of a San Diego foreclosure…

Foreclosure will severely impact your credit rating for many years to come. This will not just impair your ability to purchase another home, it will affect your ability to rent, to get a job or a promotion, and even to order cellular telephone service or cable television.

In addition, if you’re in a “sensitive” job, it could cause termination.

As for your ability to purchase another home – mortgage loan applications used to ask if you had a foreclosure in the past several years. Now they ask if you have EVER had a foreclosure. If the answer is yes, you’ll have to supply even more information and may well be turned down for that loan.

A further danger is that you could be trapped in a Zombie foreclosure. Should this happen, bills on your foreclosed house will keep mounting, and you could remain liable for several years. Learn more about Zombie foreclosures.

If you do choose to walk away, do NOT pay anyone to help you. Just call the lender and let them know.

If you’d like to discuss your other options, such as a San Diego short sale, a strategic default, or even a loan modification, do call call 619-929-1413 or write td@tomdunlap.com. We’ll be happy to talk with you.

What about the new “Walk away” program from Fannie Mae?

The new program is essentially a deed-in-lieu of foreclosure. The only thing new is that Fannie now says they’ll approve the process for homeowners who are not delinquent on payments.

The impact on your credit is still the same as a foreclosure, and it’s still a poor idea for California homeowners. Here’s why.

If you have specific questions you’d like answered, call 619-929-1413 or write td@tomdunlap.com. We’ll be glad to share the benefit of our experience in closing hundreds of San Diego short sales.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

How do you get paid when you represent me in a San Diego short sale?

As a short sale negotiator, how do you get paid when you represent me in a San Diego short sale?

All fees are paid by the bank. The bank will forgive enough debt to pay all costs of the sale, including REALTOR® commissions, title fees, etc.

Beware of agents who demand that you pay an up-front fee to short sale your San Diego house.

To learn more about how San Diego short sale agents are paid, and to ask other questions, call 619-929-1413 or write td@tomdunlap.com.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What happens if my second mortgage is really a San Diego home equity line of credit (HELOC)?

Special situations call for expert handling.

If you have a second mortgage on your San Diego home, especially a HELOC, it becomes even more vital to your future to avoid a foreclosure.

Under laws enacted in California in 2011, the bank cannot come after you for a deficiency on the first mortgage. The second mortgage is a different matter. They can’t come after you if you short sell, but they CAN come after you following a foreclosure. This is one of the primary benefits of a short sale vs a foreclosure.

Negotiating a short sale on a San Diego HELOC can be a little tricky, but we can and do accomplish this all of the time.

If you are a San Diego homeowner in distress and you have a home equity line of credit (HELOC), call 619-929-1413 or write td@tomdunlap.com to contact us today. We have extensive experience in dealing with every kind of San Diego short sale, and we can bring about a successful resolution to your situation.

We’ll be happy to explain the process and answer your questions – so don’t delay. A foreclosure simply costs too much.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What is an upside down mortgage?

An upside down mortgage is a mortgage in which the total amount you owe is larger than the amount you could realize if selling your property today at fair market value.

This is also called “being underwater,” and is very common among San Diego homeowners who purchased at the top of the market.

The only way to sell an “underwater” home in today’s market is through the real estate short sale process. In a short sale, the bank agrees to accept fair market value, less selling costs, for the payoff of your mortgage loan.

  • Do you wonder if you’re underwater – and if so, by how much?
  • Do you wonder if it’s too late for you to avoid foreclosure?

Call 619-929-1413 or write td@tomdunlap.com to tell us your situation and get answers to your questions.

What is a Deed in Lieu?

A Deed In Lieu is just that: a deed back to the bank in lieu of foreclosure.

You are simply calling the bank to say you are done and they can come get the keys to your San Diego home.

If you have one loan, you will probably be allowed to sign a deed-in-lieu. If you have two loans, this is usually not an option. Oddly, while you’d think they’d welcome the opportunity to avoid the costs of a foreclosure, most banks require homeowners to submit an application to be approved for a deed-in-lieu transaction.

But why do it?

From a credit standpoint, this could be one of the worst choices anyone might make, because it has the same effect on your credit scores as a foreclosure. And, as with a foreclosure, if your San Diego home has a HELOC or second mortgage, you could be held liable for a deficiency.

The difference is that you’ll have to move right away rather than wait for the bank to complete their months of paperwork. Thus, if you’ve chosen not to attempt the short sale of your home and are willing to bear the damage to your credit rating, why not stay in the house and save your money?

Waiting for the foreclosure and saving your money would help you pay off other obligations and have money on hand for the deposit and first months’ rent when you do have to move.

Of course, selling on a short sale is preferable if you’re trying to lessen the damage to your credit. Another of the benefits of a short sale vs a foreclosure or deed-in-lieu is that you’ll be eligible for a new home mortgage 2 to 4 years sooner.

We’ve helped hundreds of San Diego homeowners complete short sales and we can help you. So call 619-929-1413 or write td@tomdunlap.com to ask questions and learn about the short sale process.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What is loan modification, and should I attempt it?

Before you decide to attempt a loan modification…
call 619-929-1413 or write td@tomdunlap.com for some no-cost advice.

A Loan Modification occurs when the bank modifies or changes the terms of your loan.

The most common modification is a temporary reduction in the interest rate and resulting payment.

As a result of massive Internet advertising and a variety of confusing news stories, many borrowers have a mistaken belief that a loan modification also is likely to include a big reduction in the amount owed. This is possible, but not likely. Statistics show that it happens in only 17.1% of all loan modifications.

Loan modifications sound good – but for many homeowners the attempt at modification has led to disappointment and greater financial loss.

When the Treasury launched the HAMP (Home Affordable Modification Program) in March 2009, they projected aid to up to 4 million homeowners within a few short months. However, as of January 2013, only about one million permanent modifications had been granted under the HAMP program. Overall, it has not been a huge success, nor has it benefited many homeowners. *

Proprietary modification programs implemented by mortgage servicers have produced slightly better results.

Due to confusion, poor record keeping, non-communication between bank employees, and lack of commitment on the part of loan servicers, some homeowners have found themselves in foreclosure while they thought they were working on a loan modification. Meanwhile, they’ve paid thousands in temporary modification payments.

Another reason for this failure is non-compliance by the loan servicers and a complete lack of enforcement by the government. The truth is that the financial incentive offered by the government for modifying a loan is far less than the financial incentive presented by foreclosure. The result has been thousands of preventable foreclosures.

Congressional panels and committees have put pressure on the Treasury to crack down on HAMP servicers who aren’t doing enough, and HAMP payments have been withheld from some of our largest banks.* But the abuse goes on.

If you’ve attempted a loan modification and failed, you need a “different than normal” approach to a short sale.Call 619-929-1413 or write td@tomdunlap.com to ask why. We’ll be glad to explain.

If “legitimate” programs weren’t bad enough, San Diego homeowners in distress also need to beware of Loan Modification scams.

Legitimate loan modification does not entail an up-front payment. Companies that promise to help you get a loan modification in exchange for a hefty up-front payment are simply scammers. If you’re contacted by such a company, run the other way.

They cannot and will not do anything that you cannot do for yourself.

*** NOTE: If you are facing imminent foreclosure, you might need professional assistance. Contact a trusted attorney. If a foreclosure is pending, you first need to make sure that the left hand tells the right hand to cancel it while the loan modification is in review.

Do it Yourself Loan Modification for San Diego Homeowners in Distress

THE FIRST STEP: Call the bank that has financed your home loan. Prepare to sit on hold for some time (45-60 minutes) and be transferred more than two or three times. Once you get the “right” person on the line, ask for the Loan Modification package and then ask them to list current programs that they offer.

Ask: “What should I know specifically about how your department works?”
Keep your requests simple and kill them with kindness.

THE SECOND STEP: Once you’ve received the Loan Modification package, READ and RE-READ it. Never assume that what you get in the mail is what you were promised.

THE THIRD STEP: Complete the package thoroughly.
Focus on this issue: WHAT CAN YOU AFFORD? The bank will judge what they think. If you cannot afford their basic bottom line, then you are wasting their time and yours.

The bank looks at debt to income (DTI) ratio — 80% of your net income (after taxes) divided by gross expenses, including monthly housing payment. That is THE trick: you must be able to afford what the modification might be OR you could burn a bridge.

Why? Because loan modification requires that you show you can afford the payments. Qualification for a short sale requires that you show you cannot afford the payments.

If you choose to follow the route of a DIY Loan Modification, keep in mind that you will basically be paying on one loan while the other balance sits frozen until you sell the property. If you eventually decide to sell, you will still have to pay the lender back.

Let’s say that you sell your home two years from now. If the value of your property has not gone up, you are back to square one looking at a short sale. And, two years from now, the climate for short sale approvals might not be so friendly.

THE FOURTH STEP: Before you submit the package, make a copy for yourself and make sure that the pages are in order.

THE FIFTH STEP: Cookie-cutter guidelines are issued that allow low-level employees to approve certain packages.

However, you need to take action and follow up on your case throughout the process. If you are asked to submit anything else in writing, do so within 48 hours to keep the file moving. Follow up with your point of contact every 10 business days. If you have not received a final decision after 30 days, escalate your case to the next level.

THE FINAL STEP: Once you’ve received an approval for your loan modification, you should receive initial paperwork. All should be well within 90 days. If not, something is wrong. Call the bank.

If you are a distressed San Diego homeowner and you aren’t sure if loan modification is the answer for you, call 619-929-1413 or write td@tomdunlap.com to arrange a no-obligation consultation and learn your options.

We’ll help you determine whether or not the bank would consider you for a modification and we’ll explain your other alternatives.
…………………..
*References: Jon Pryor on Newswire Dec. 7, 2011

Leslie Berkman in The Press Enterprise Jan 14, 2012


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What is forbearance?

Forbearance is the term used when the bank agrees to let the borrower stop paying for a set period of time.

Those missed payments, plus interest, must be repaid.

Many banks offer short-term forbearance for homeowners who are experiencing temporary hardship. This must be a hardship with “an end in sight.”

Homeowners who become unemployed are given more leeway and assistance.

As of July 2011, FHA servicers are required to extend the forbearance period for unemployed homeowners from 4 months to 12 months. New FHA regulations have also made it easier for unemployed borrowers to qualify. Borrowers who are turned down for forbearance have 7 days to appeal and / or to produce additional documentation to support the request.

In January 2012, Fannie Mae set forth similar guidelines, which became mandatory for their loan servicers as of March 1, 2012.Freddie Mac has now also extended their forbearance period to 12 months.

During the forbearance period, mortgage payments will be reduced or eliminated. Missed payments must be paid back over time at a later date, generally beginning 6 months after the homeowner has resumed making regular monthly payments.

The good news for homeowners who want or need to sell is that they are allowed to market their homes during the forbearance period. This allows time to find a buyer, negotiate with the lender if the short sale of a home is necessary, and complete the sale without fear of foreclosure.

If you want or need to sell or short sale your house during a forbearance period, talk with San Diego’s short sale specialists, the San Diego Pro Team.

Call 619-929-1413 or write td@tomdunlap.com. We will be glad to talk with you with no obligation.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What are recourse loans?

The difference between recourse and non-recourse loans in California

A home loan or mortgage is secured by the property. A recourse loan is a loan under which the bank could both foreclosure AND sue the homeowner for the balance due (deficiency) that remained after a foreclosure was re-sold. In some states, short sales are also subject to deficiency judgments.

A non-recourse loan is one that prevents the bank from coming after the homeowner. The bank can take what is gets in a short sale or foreclosure and that is the final remedy.

The good news for San Diego homeowners:

In California, all home loans are non-recourse. On January 1, 2011, Senate Bill 931 removed the threat of deficiency proceedings from all home purchase loans. Then, on July 18, 2011, Senate Bill 458 extended the provisions to cover all junior liens in the short sale of a home.

Thus, if you short sale your house, you cannot be held liable for a deficiency. This is one of the benefits of a short sale vs a foreclosure. Following a foreclosure or the transfer of a home via a deed-in-lieu of foreclosure, a second lien holder can sue for the deficiency. There are, of course, many “if’s, and’s, and but’s” involved. For instance, second loans taken as part of the purchase are treated differently than are home equity lines of credit used for other purposes.

Before you consider allowing your home to go into foreclosure, check with an experienced real estate attorney to see where you stand.

SB 458 is good news for Californians considering the short sale of a home, but…

… it doesn’t remove the need for a strong negotiator on your side. Instead of demanding a deficiency payment, asset managers can now simply refuse to allow the short sale if they don’t get the dollars they want.

Homeowners still need a strong agent who will help them price the house to sell, market it well to attract a buyer, AND negotiate skillfully with the asset manager.

Tom Dunlap has both the skill and the experience to get your short sale sold and approved – so that you can get on with your life.

No two short sale situations are exactly alike. When you want advice that applies to your specific situation, click here to request a no-obligation consultation.

You can also reach us by calling 619-929-1413.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

What are deficiency judgments?

Deficiency judgments are legal obligations to pay after a court proceeding. They arise when a person fails to repay the entire amount due on a promissory note. This is, of course, common after the foreclosure of a home in today’s real estate climate, because foreclosed homes typically do not sell for enough to cover the mortgage loan balance at the time of default. The difference between what was owed and what was realized through the sale is called the deficiency.

Unless the (former) homeowner agrees to make payments on that deficiency, the bank can sue and obtain a judgment for up to the full amount owed. Then they’ll take steps to collect the debt through seizing bank accounts and other assets or by wage garnishment.

In some states, deficiency judgments can also result after a short sale. Fortunately for San Diego homeowners, deficiency judgments are something you don’t have to worry about after the short sale of a California home. This threat was removed via SB 931 and SB 458, both passed in 2011.

However…

The rules are not the same for foreclosure. If you have a second mortgage and the bank forecloses, you could be liable for a deficiency on the second mortgage unless it was made as a part of your purchase. In other words, if you took out a home equity line of credit at a later date, the bank will attempt to collect that debt.

Thus, you still do need a strong agent to negotiate for you – to assure that the short sale of your San Diego home does close.

As you might expect, second lien holders are sometimes reluctant to cooperate with a short sale when they stand to gain more through a foreclosure.

Even if you have only a first mortgage… Since they can’t ask for a deficiency payment, asset managers are now pushing harder for higher selling prices and/or lump sum payments from purchasers. Without a strong negotiator on your side, your home could go into foreclosure even with a buyer standing by, ready to purchase.

Our specialists stand ready to help you avoid foreclosure – just as we’ve helped hundreds of other San Diego homeowners. So reach out today…

Every short sale situation is different. If you’d like specific answers that relate to your situation, call 619-929-1413 or write td@tomdunlap.com to arrange for a no-obligation consultation.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Can I Short Sale My Vacation Home or Second Home?

Don’t let uninformed agents tell you what you can’t do.
In San Diego County, a number of homeowners own more than one property. During the current economic climate, many find themselves needing to work out a short sale of a second home.

A Common Short Sale Myth: You cannot get a short sale approved on a second home, vacation home, or rental property.

The Fact: Of course you can. Second homes, vacation homes, and rentals can all be sold as short sales. Further, all residential properties of up to 4 units are now covered by the California laws preventing banks from suing for deficiencies after a short sale – whether or not they are owner occupied.

The real issue regarding the non-owner occupied short sale is the income tax implications. You need the advice of a good tax planner when you are thinking of a short sale on a vacation home or residential rental.

Good planning and expert negotiation are the keys to a beneficial outcome.

If you have a second home or income property and need to short sell, you need good advice. Call 619-929-1413 or write td@tomdunlap.com to tell us your situation and get answers that apply to your specific situation.

Tom Dunlap will be pleased to answer your questions and explain how the real estate short sale process works with regard to your second home or residential investment real estate.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.

Testimonial 3

man standing by a truck

“My financial picture had changed. I had to sell my Hillcrest home on a short sale. You fielded all of the documents required by my lender and were able to hold my hand through the process. The market I had to work with was 110% a buyer’s market, so this was a very tough project. ”

“I don’t know what I would have done without your professionalism throughout.”

Is Right Now a Good Time to Invest in San Diego Real Estate?

Yes, right now is the perfect time to invest.

 

In 2012, PricewaterhouseCoopers and the Urban Land Institute ranked San Diego as one of the top ten “real estate markets to watch in 2012.”

In 2013, San Diego ranked high on the list of “best cities” for a variety of attributes, including “Best City to Live In,” “Best City for Twentysomethings,” “Best Cities in Which to Stay Young,” and “Best Cities in Which to Raise a Family.”

In 2015 a WalletHub survey ranked San Diego the 6th best large city in the nation and the 6th best city for military veterans.

According to the PricewaterhouseCoopers Emerging Trends in Real Estate Forecast, this popularity is due to San Diego’s near-perfect year-round weather, which attracts a steady stream of affluent retirees as well as those trained for employment in San Diego’s numerous – and expanding – biotech companies.

It could also be due to the quality of education available here. WalletHub ranked San Diego 3rd overall in education and the San Diego Unified School District tied for “Best in the nation.”

While San Diego home prices reached their peak in 2006 and then crashed to 2001 levels by the end of 2009, prices have been steadily climbing. Will they soon rise above the 2006 peak? We don’t know.

We do know that the still-low interest rates may present a once-in-a lifetime opportunity to own prime San Diego real estate.

It’s still a good time to buy Rental real estate …

Now is also a good time to buy and own rental real estate. Consumers who lost their homes to foreclosure or sold on short sales will, in most cases, be unable to purchase new homes for at least a few years. This creates a heavy demand for rental properties and pushes rental rates upward. In addition, our population continues to increase as more move here to enjoy all that San Diego has to offer. Right now only about half of San Diego’s population owns their own home.

Find your San Diego dream home or investment property now – so you don’t look back in a few years and say “I wish…”

When you’re ready to begin the search for your perfect investment, call 619-929-1413 or write td@tomdunlap.com. We’ll be pleased to assist.

REO’s and Short Sales – Aren’t They Dangerous?

Is it Dangerous to buy San Diego Short Sales or REO properties?

It certainly can be, if you don’t have the right guidance. But when you have us at your side, you’ll have agents with the tools and experience to help you find a true San Diego foreclosure or short sale bargain – and then negotiate the best possible deal. Just as important – you’ll have guides to steer you around the hidden pitfalls that have plagued so many other home buyers.

The hazards of buying San Diego foreclosures are many, beginning with the fact that they come without the property disclosures that homeowners must submit. But we can help you learn what you need to know about a home before purchasing, understand what that home is worth, and determine whether or not the price is worth the investment.

Short sales, on the other hand, do come with a property disclosure. Also, in most cases the homeowner is still in town, available to share information about such things as how to run the sprinkler system and who to call for lawn maintenance services.

You may have heard that it is difficult to get short sales approved. This is often true. Unless the agent knows how to properly present the short sale documents to the lender, it can take months, and the sale may not be approved at all. Sadly, many agents do NOT know how to handle a short sale transaction.

We have a track record of success in the San Diego short sale market. In fact, when we work for sellers, our lender approval rate on short sales in San Diego County is 98%. And while we can’t step into the listing agent’s shoes, our experience in short sales gives us insight to spot which ones will be accepted, and which will not. We’ll help you find the short sales with the highest probability of making it to closing.

To learn more, call 619-929-1413 or write td@tomdunlap.com.

Failed loan modifications – 3 stories and a warning

No One Needs This Kind of “Help”

Chris Serres, in a Star Tribune article, reported these stories of homeowners who were offered help – or promised help – and are far worse off for their efforts.

The nightmare begins with the first contact, when homeowners learn that they must first stop making their mortgage payments.

* If you’re now attempting a loan modification and being put through a wringer,call 619-929-1413 or write td@tomdunlap.com. We can answer your questions, offer you insight as to your chances of success, and advise you on what to do next to avoid foreclosure.

The Weddles

”Patti, 51, and Scott Weddle, 57, of Harris, Minn., were ecstatic when J.P. Morgan Chase offered in November 2009 to cut their monthly mortgage payments by about 20 percent under a trial modification. Patti was out of work with a neck and back injury, and the Weddles were having difficulty making ends meet.”

“Nearly a year later, the Weddles were told that their application for a permanent modification was denied and that they would have to pay $24,228 to bring their mortgage current and avoid foreclosure.”

”The Weddles insist the demand came as a shock, because they had made all their payments on time under the trial modification. “We did everything that was asked of us, and it only pushed us deeper in the hole,” Patti Weddle said.”

”When the Weddles got turned down for permanent relief under HAMP, they decided to stop making their monthly payments. They expect to receive foreclosure papers any day and most of their belongings are packed. “If we had $24,000 lying around, then we wouldn’t have sought help to begin with,” Patti Weddle said.”

Paula Viehman

“Paula Viehman, 60, recalls the day she was approved for a trial modification in June 2009. After a 30-minute conversation, a CitiMortgage representative agreed to cut her monthly payment by half to $929. “It was the answer to my prayers,” said Viehman, a state employee who lives in Minneapolis.”

”Fifteen months later, CitiMortgage sent two letters claiming she was in default on her mortgage and owed $13,569 in back payments, late fees and other charges. When Viehman called to complain, she learned that CitiMortgage had denied her application for permanent relief under HAMP, though the bank had never notified her.”

”Viehman refuses to make the lump-sum payment, largely on principle, because that would mean accepting Citi-Mortgage’s claim that she’s in default. Though she continues to make monthly mortgage payments, she suspects the bank will eventually foreclose on the house where she’s lived for 25 years.”

“The longer I go through this, the madder I get,” she said. “I did everything they asked and more.”

”Citigroup, CitiMortgage’s parent company, declined to comment about Viehman’s complaints because of privacy concerns. However, in a written statement, the bank said the original terms of a mortgage remain in place during a trial modification.

Borrowers only receive relief from delinquent payments if they get permanent modifications.”

And of course, the banks claim that homeowners have fair warning via the paperwork they sign.

Lynda Devine

”Lynda Devine, 49, of Faribault, said she had not even heard of HAMP until she called her mortgage servicer, Aurora Loan Services of Colorado, about a routine matter. While on hold, she found herself listening to a recorded message that said she might qualify for HAMP. She checked it out and learned it was a program sponsored by the Obama administration. “It all seemed very legit,” she said.”

”Aurora agreed to cut her monthly payment to $1,400 from $2,000 under a trial modification. But Devine, a children’s mental health social worker and waitress, soon found herself mired in a bureaucratic nightmare. As she sought permanent relief, Aurora kept asking for the same documents — including bank and tax statements. Devine estimates she has faxed documents to Aurora more than 60 times.”

”Nonetheless, she received notice in July that she was in default. Soon after, she got a letter from Aurora’s law firm saying she would have to come up with $13,496 or face foreclosure. Devine couldn’t stomach the idea of losing her 1920s-era farmhouse and her 35 acres, where she keeps three beloved horses.”

”Devine borrowed against her truck and horse trailer to pay the $13,496, but she’s considering suing Aurora to get the money back.”

These stories are but the tip of the iceberg…

Carl Christensen, a Minneapolis real estate attorney, told writer Chris Serres that he gets 15 calls per week from shocked borrowers who thought a loan modification was going to allow them to keep their homes.

To quote Mr. Christensen: “The banks put out their hand and say, ‘We’re going to help you,’ and then stab people right in the back.”

To some homeowners, it seems as if the banks are simply coercing people into making a year or more of extra payments before seizing their homes.

The warning:

If you want to attempt a loan modification, be careful. Don’t proceed on what someone tells you over the phone. Instead, read every word of the paperwork they send you, and if you don’t understand even one sentence, get help. Seek out a qualified real estate attorney and find out what you’re signing before you get in over your head.

If you want to discuss your options, call 619-929-1413 or write td@tomdunlap.com. We’ll be happy to share our knowledge of the bank’s guidelines regarding loan modifications. We’ll also answer your specific questions about short sales.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.