Zombie Foreclosures – an Endless Nightmare

Are you still liable for the house you lost through foreclosure?

Are bills for water, sewer, HOA dues and property taxes accruing right now – in your name? Is the City preparing to sue you for letting the yard become overgrown and littered?

If yours was a zombie foreclosure, the answer is yes.

Zombie Foreclosures are one more reason why a short sale is the safest course of action for underwater San Diego homeowners who can no longer keep up with mortgage payments. A short sale the only option that is absolutely over when it’s over.

Here’s what happens in a Zombie foreclosure…

Homeowners who let their homes go into foreclosure often move out after the bank notifies them that the auction date has been set. They assume that on the date specified, ownership will have transferred from them to their lender. Unfortunately, that isn’t always the truth.

Banks do what they believe to be in their own financial best interests – without regard to how their actions will affect homeowners.

That’s why banks, in their quest to avoid costs, sometimes do not complete the foreclosure process. Instead, they postpone the auction date. That lets the bank off the hook for property taxes, city services, and homeowners’ association dues. It also absolves them of responsibility to maintain the house and grounds in keeping with neighborhood standards.

In the $25 billion settlement with the state attorneys general in 2012, the nation’s five largest mortgage lenders agreed to inform borrowers of any decision to forgo or delay a foreclosure. But they don’t always adhere to that promise, and homeowners don’t always read their mail.

And therein lies the nightmare.

Thousands of homeowners who believed that they no longer had any legal interest in their homes are now being presented with bills from cities, counties, and homeowner’s associations – where property taxes, water and sewer services, and dues have not been paid since the homeowner moved away. In some cases, where an abandoned home has been vandalized and/or the properties have been left to the forces of nature, cities are also looking to the homeowner of record to make repairs, clean up the yards, and bring the homes up to neighborhood standards.

It gets worse…

In other cases, the banks take title, then simply don’t do the paperwork correctly. So while the former homeowner believes they’ve been cleared of the debt through the foreclosure, the banks are still reporting to the credit bureaus, claiming thousands of dollars still due and owing. The result is that no matter how well that homeowner has taken care of bills since the foreclosure, their credit scores remain in the gutter.

A second problem rears its ugly head when former homeowners are hit with judgments against them for the 2nd and even 3rd liens against the property. Banks don’t have to take immediate action when they decide to collect, so it could be 2 or 3 years before that former homeowner realizes that his or her secondary liens were not wiped out by the foreclosure.

What’s the solution?

If your home has already been foreclosed upon, check with your county tax assessor’s office to see whether they still show you as owner. Also check with your homeowner’s association to verify that ownership has legally been transferred to the bank. If not, call us for further assistance to determine the outcome. We have access to software and data that is more up to date than the public data banks.

If you’re underwater and behind on payments right now, choose the only SAFE solution: List your San Diego or San Diego County home as a short sale.

The short sale process will absolutely transfer ownership from you to your buyer. In addition, none of your lien holders will be allowed to sue you for a deficiency. When it’s over – it will be over.

You won’t suddenly – 2 or 3 years down the road – find yourself facing Zombies.

You’ll be able to get on with your life, begin rebuilding your credit, and purchase a new home within 2 or 3 short years.

So if you’re behind, call us today. We’ve helped thousands of San Diego homeowners avoid foreclosure – and we’d like to help you too.

You can reach us by writing td@tomdunlap.com or 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.

If you have a home to sell in San Diego, today’s market is good news.

Right now, the demand for homes in San Diego is strong, and correctly priced homes are selling quickly.

Because the supply of homes for sale in San Diego is at far lower than normal levels, we’re seeing fifteen or twenty buyers competing for each home priced at market value – and many of those buyers have cash in hand. As a result, San Diego homes are now selling at or above their listed price.

In a balanced market, homes typically sell for 95% to 98% of list price.

If you owe more than your house is worth in today’s market, now is the time to short sell.

Consider these facts:

  • If you offer your house as a short sale now, you’ll have good offers to choose from. You’ll spend less time negotiating with a buyer; and when you present your lender with a solid offer from a well-qualified (or cash) buyer, you’ll increase your chances of getting a speedy and positive response.
  • Getting this over and done with now will free you to get on with life – and within 2-3 years you’ll be eligible for a new mortgage loan. (If you let the house go into foreclosure, you’ll wait for 5-7 years.)
  • The sooner you close this chapter, the sooner your credit profile will recover.

What can we expect in the coming months?

We have no way of knowing. However, prices have continued to rise in San Diego over the past 4 years.

This is a situation that equity sellers should also consider carefully as they weigh their alternatives.

  • The current market presents a unique opportunity for move-up sellers. Due to the law of percentages, selling a mid-range home to purchase a high end home means “losing” a little to gain a lot.

If you’d like to learn your home’s value in today’s market, or if you have questions about short sales, please call 619-929-1413 or write td@tomdunlap.com.

We’ll be glad help…

P.S. Are you SURE you need a short sale?

The San Diego real estate market is changing rapidly, so your home that was underwater last year may no longer be underwater.

To get an estimate of your home’s current value, just CLICK HERE to get an instant estimate.

Then call 619-929-1413 or write td@tomdunlap.com to request a detailed market analysis.

There just might be good news in your future…


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.

*Source: www.zerohedge.com

Is a Deed-in-lieu safer or better than allowing a foreclosure?

Is a deed-in-lieu better than a foreclosure?

In a word, no. So what’s the difference?

In terms of your credit, there is no difference between a deed-in-lieu and a foreclosure. A deed-in-lieu merely saves the lender from spending the time and money to go through the foreclosure process.

The only difference to you is that you’ll probably know a definite date when you need to be out of the house – and you’ll probably need to be out sooner. With a foreclosure, your move-out date could be delayed for up to a year.

Meanwhile, under today’s guidelines, a foreclosure or deed in lieu will probably require 7+ years of good credit before buying a next home.

In addition, under California law, if you have a second mortgage that was not a “purchase money mortgage” the lender can come back on you for a deficiency after either a foreclosure or a deed-in-lieu. The only way to avoid that risk is through the short sale of your home.

The strange thing is, even though it’s more convenient, cheaper, and less time-consuming for the bank, you might not even be allowed to sign a deed in lieu. In order to be considered, you’ll have to fill out an application. And if you have two loans, you’ll probably be denied unless the same investor (not the same servicing company) owns both notes.

So… Is a deed-in-lieu better than a foreclosure?

Our answer is: “Don’t even consider it.” There simply is no benefit to the homeowner.

What about the January 2013 announcement from Fannie Mae?

In 2013 Fannie Mae announced that they’ll allow on-time borrowers to wipe out their mortgage debt through a new “mortgage release” program. This program is simply the re-naming of the deed-in-lieu process. And while it may be of benefit to homeowners in other states, it’s not a benefit to California homeowners. Here’s why.

Every 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 happy to analyze situation and provide the answers you need before making a decision that will affect your future.


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 a Short Sale Will Affect Your Ability to Buy Another Home

Many San Diego homeowners have worked hard to preserve good credit. Some come to us with a pristine credit record, yet are saddled with debt – most of which they have incurred in order to keep current on mortgage payments. The conclusion that they need to offer their house as a short sale is a very heavy one to reach for any homeowner. And, for some, the idea of foreclosure seems painless and quick under the circumstances.

The real fact is that a lender will not like seeing either on your credit. AND, the very real fact is that you can recover your credit within 24 – 36 months after the short sale of your house while 60 months is the minimum after a foreclosure.

There are about as many opinions as people writing or speaking on this topic. The real answer is that no one really knows how a short sale will affect your credit scores.

I hear REALTORS® saying without a doubt… a short sale and a foreclosure are completely different. Then, I hear bankers and mortgage brokers saying that default is default… don’t do it. The truth is, both sides of the coin are right. What the mortgage or loan officer fails to realize is that anyone asking that question is very likely without a BETTER alternative.

Only the people at Fair Isaac, the FICO people, really know what each item does to the math on your credit score. And there are many factors that go into the mix. In addition, since each person has a different credit history, the short sale of a home will affect different people in different ways.

Let’s assume that it is you asking the question. You’re paying the bills on time, but paying off the mortgage is not an option for you. Let’s say you are either in default or headed into default OR that you have decided to keep paying the note on the asset that has lost a large chunk of value.

Let’s assume that you are thinking about the credit risk of foreclosure versus a short sale.

We know that a default is a default. And you will probably never get through a short sale UNTIL you are in default. If you are paying the bills, the lender assumes that you must have some means to do so, somewhere.

So, if you want to Buy a Home After a Short Sale…

A foreclosure will remain on your credit report in the public records section for 10 years. In addition, you will need to answer these questions on any loan application:

  • Have you ever had property foreclosed upon or given title or deed in lieu thereof?
  • Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment?

There is no such question for short sales.

Again, the real fact is that a lender will not like seeing either a short sale or foreclosure on your credit. But the second very real fact is that you can recover your credit with 24 – 36 months after the short sale of a home while 60 months is the minimum after a foreclosure.

If you’re ready to short sell your house, or simply have questions related to short sales, call 619-929-1413 or write td@tomdunlap.com.

We have a track record of 98% success in selling and closing the short sales we list – and we’ve helped hundreds of San Diego homeowners just like you avoid foreclosure and get on with life.

We’ll be happy to explain the process and answer all 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.

Don’t use your Visa to make your San Diego home mortgage payment!

Holding on to your home is an honorable goal, but going deep into credit card debt to do so is a sure path to economic ruin.

Your credit cards will only go so far, and then what? You could lose the house to foreclosure and be left with a huge high-interest unsecured debt.

Don’t wait and let the situation get worse.

If you wait, the financial fallout can be even more dire…

If you are in financial trouble or think you may be headed that way, consider getting out from under that house debt through a short sale. Under California law, the banks that own your home loan or loans cannot come back to you for the deficiency if you sell. If you allow the house to go into foreclosure, your second lien holder can sue you and obtain a deficiency judgment.

Meanwhile, if you’ve run up credit card debt that you can’t or don’t want to pay, the credit card companies can also sue and obtain judgments.

The only way out of those judgments is to pay them or file for bankruptcy.

Once you’ve listed your home as a short sale with an experienced San Diego short sale agent, you can stop making those payments – giving yourself space to breathe and to accumulate some funds.

Experienced is the key word. Don’t list with an agent who lacks the experience and expertise to not only find a buyer but to negotiate with the banks to bring your short sale to a closing. This is the time to enlist the aid of short sale specialist.

The economy is still in an unsettled state, being buffeted by forces neither you nor we can control. So conserve your cash and make decisions that will aid in your long term financial health.

To learn more about San Diego short sales and how a short sale will affect you, call 619-929-1413 or write td@tomdunlap.com for personalized answers to your short sale questions.

We’ve helped hundreds of San Diego homeowners avoid foreclosure and have a track record of 98% success in selling and closing our short sale listings.

Every situation is different, so use this opportunity to get specific answers for your specific situation.

Call today. We’re here to help.


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 hardship prevents you from making mortgage loan payments?

Before the bank will consider your San Diego short sale you’ll need to show that you’ve suffered a hardship. Thus, short sale hardship letters are a necessary component of a short sale request package.

Does your hardship qualify? Unless you clearly demonstrate a hardship, the bank will assume that you do have the ability to continue making payments, and your short sale request will be denied.

What constitutes a hardship?

A change in circumstance that affects your financial state. For instance:
• Death of a spouse/partner who contributed to the mortgage payments
• Illness that has prevented a person from working
• Layoff
• Divorce
• Change in loan payment due to an Adjustable Rate Mortgage (ARM)

Short sale hardship letters, which explain what has changed and why, are submitted along with financial information such as tax returns, pay stubs, bank statements, and a run-down of monthly expenses.

Have you suffered a qualifying hardship?

If you need help deciding whether your situation qualifies as a hardship for a short sale in San Diego, call 619-929-1413 or write td@tomdunlap.com.

Because we’ve helped hundreds of homeowners successfully sell their homes, we have become well acquainted with each bank’s preferences. We know what needs to be included in short sale hardship letters – and how to say it. We’d be pleased to share that information.


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.

Want the bank to agree to a short sale of your home? You’ll probably need to stop making payments.

San Diego homeowners who have been trying to preserve their credit rating but need to short sell are often dismayed to learn that they’ll probably need to stop making their mortgage payments in order to be considered for a short sale.

This is because the bank wants to see that continuing to make payments is a hardship. If you continue to make payments, no matter how far you’re going into debt to do so, they can’t see the hardship.

Once you stop making payments, you’ll get the attention of the analysts, negotiators and investors at your lending institution(s).

However, this is not the end of the world. If your other payments are up to date and you manage your money carefully, your credit scores will begin to improve as soon as the short sale of your home is final. In as little as 2 years you could be eligible for another home mortgage.

The thing to remember is: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 questions and get answers that relate to your specific situation.

You may even be able to get the short sale of your home approved with all payments current. This largely depends on your lender and how much weight they give to short sale hardship letters. Each asset manager and each homeowner’s situation is different.

If you need help figuring out if you should stop paying your mortgage so you can do a short sale in San Diego, please don’t hesitate to contact us. We’ve studied each bank’s guidelines, know what carries weight for them in short sale hardship letters, and have developed a working relationship with most bank negotiators – so we can guide you in making that decision.

If you’d like to talk it over, 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.

The Value of Persistence in a San Diego Short Sale

Robert Ringer, former real estate agent and best-selling author of “To Be Or Not To Be Intimidated,” and “Looking Out for #1,” writes a lot about success. One of his consistent themes is the necessity for persistence.

In one book he tells the story of dealing with call centers. In one instance he wanted to change his account information with a phone company. The representative told him he’d need to print a form, sign it in front of a notary, and mail it in.

But he didn’t want to go through all that, so he hung up and re-dialed. The next representative changed the information in the company computer system and he was done.

Another time he wanted to buy a product in bulk for a certain price. The representative said no, that couldn’t be done. So, once again he hung up and re-dialed.

The next person he talked to agreed to sell him the product in bulk for the price he wanted. He got what he wanted a lot faster and easier than if he had spent time arguing with the first person.

So what does succeeding with call centers have to do with closing San Diego short sales? Both require persistence.

Negotiating the successful short sale of any home begins with having the expertise to properly prepare both the paperwork and the argument in favor of the short sale. It requires having the facts to back the argument, and the persistence to make sure those facts are heard and understood. If the first person we talk with isn’t willing to listen or cooperate, we ask someone else.

Success also requires unrelenting follow-up, so that our clients’ files don’t get shoved aside or forgotten. This persistence increases our odds of success – and it’s a procedure that inexperienced agents don’t even realize they need to use.

When we list your San Diego area house as a short sale, our goal is to help you wipe out the upside down debt and remove the threat of foreclosure. We also want to keep you in a position to get a new mortgage loan in two years rather than the 7 to 8 years you’ll have to wait if your home goes to foreclosure.

Success in those goals requires the kind of persistence that refuses to take no for an answer. And that’s just the kind of persistence that we’ll use on your behalf.

If you are considering the short sale of a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego, call the team that doesn’t give up.

To get your questions answered quickly, call 619-929-1413 or write td@tomdunlap.com. We’ll be happy to explain the real estate short sale process and answer any questions you might have about the possible short sale of your San Diego area home.


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.

For Bank’s Short Sale Negotiators, Common Sense is not a requirement

San Diego real estate agents – and agents across the nation – have a hard time understanding the actions of bank’s short sale negotiators. Often, their decisions and demands are completely lacking in common sense.

A conversation that was related to me by another San Diego real estate agent illustrates the kind of thinking that makes us wonder about their real objectives. Here’s how it went:

Bank’s short sale negotiator:
“I can’t process this short sale without the TPG form filled out with the seller’s full name.”

Agent: “Based on my calculations, this short sale will help your company avoid a $17,000 loss, but you’re telling me that unless I can get you a corrected TPG form, you’ll reject the short sale of this home and subject your company to a potential $17,000 loss.”

Negotiator: “That’s right.”

Agent: “But $17,000 is a lot of money. Don’t you agree?”

Negotiator:
“I don’t care about the money. The TPG form is company procedure.”

You’d think there was a serious mistake, wouldn’t you? But no, that wasn’t the case. And the negotiator was the only one with a problem. The Title company and the buyer’s lender were completely OK with the paperwork as it was.

The problem was a discrepancy in the seller’s name. His full legal name was something like “John W. Doe II.” But one form had “John Doe” entered for the seller’s name. The short sale negotiator was going to reject the short sale of this home unless his name on that form was changed to “John W. Doe II.”

She was willing to subject her investor and/or the banks’ shareholders to a minimum $17,000 loss because she wanted a different piece of paper.

You know that no business person dealing with their own money would take that attitude. But the short sale negotiator wasn’t dealing with her own money. So all she cared about were the procedures and the forms. Common sense didn’t enter the picture at all.

The result of this kind of nonsense is that many banks turn down short sales only to lose more money through a foreclosure.

Had this agent been unable to secure the required form, the house would have gone into foreclosure within 6 months. By then, due to the rate at which market values were falling at the time, it would have lost $13,500 in value by the time of the foreclosure. By the time it went through the foreclosure listing process, it would have lost another $7,000 to $14,000.

But the bank’s negotiator was willing to take that loss unless the form was filled out correctly and re-submitted.

If you were a stockholder in that bank, would you have approved?

This scenario leads us to 2 conclusions:

  • First, the banks need to train their negotiators in the art of using common sense and looking at the bottom line.
  • Second, agents who represent sellers in short sales need to learn how to “head these problems off at the pass.”

Short sale request packages need to be submitted in the manner that pleases the bank. And each bank has a different way of being pleased. Short sale agents need to do their homework.

In addition, agents need to check and double-check the forms before submission. A name discrepancy is minor, but in this case, it nearly put the seller in foreclosure.

Our careful attention to detail and knowledge of what each bank wants is one of the reasons that in nine years of dealing with short sales, we’ve been successful 98% of the time.

So if you need to short sell your house in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego, call 619-929-1413 or write td@tomdunlap.com.

We’ll be happy to meet with you to explain the real estate short sale process and answer any questions you might have.


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.

In San Diego Short Sales, Knowledge is Power

Sometimes you have to wonder if the bank negotiators even know their own investor’s guidelines. And if they do know the guidelines, why they put roadblocks in front of San Diego residents trying to short sale their homes.

Each investor does have their own guidelines for short sales, which is why a short sale agent’s first step in preparing a short sale package is learning who owns the loan. The next step is knowing that investor’s guidelines.

If the agent doesn’t have that information, an uncooperative short sale negotiator can “run a bluff” or tell an outright lie, and the San Diego short sale agent won’t know the difference.

When it comes to short sales, our knowledge is your power. Call 619-929-1413 or write td@tomdunlap.com to tell us your situation and get the answers you seek.

A short sale saved by knowledge…

Not long ago we closed a Kensington short sale owned by Fannie Mae. The bank’s appraiser said this San Diego area home was worth $620,000.

Because we’ve closed short sales on Fannie Mae owned homes in San Diego many times, we knew their guidelines and what they would accept as a percentage of that value.

But, when we presented an offer for $6,000 more than the price we knew was acceptable under those guidelines, the short sale negotiator countered the offer. She said the investor would not go that low and buyers must pay more. They had seen other homes they liked and in fact had a “fall back” home in mind if the bank refused this offer. They weren’t going to pay more.

Because we knew this was an acceptable offer, we were able to persuade the negotiator to accept the offer as it was presented. Had we not known the Fannie Mae guidelines, this sale would have fallen through and the home would have become yet another San Diego foreclosure.

Knowledge is one of the reasons why after 9 years of negotiating San Diego area short sales, we have a 98% success record in keeping homeowners out of foreclosure.

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 happy to answer your questions and to explain the short sale process.

If you’re underwater on a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and need to sell, we can help.


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.

In a San Diego short sale, do I have to know who owns my mortgage loan?

Yes, when making application to short sell your San Diego house, you really do need to know who owns your loan.

Generally, it isn’t the company you pay. Most loans today are sold almost immediately after being granted. In fact, they may be sold 2 or 3 times within the first few weeks or months. Many are sold to Fannie Mae, Freddie Mac, or a Wall Street Firm.

The company you send payments to is simply a subcontractor, hired to collect payments, handle escrows and accounting, and manage their debt collections and foreclosures. These banks are “asset managers” and now, short sale negotiators, for the investors who actually own the loans.

The “Final Rule” amending Regulation Z (Truth in Lending) went into effect on January 1, 2011, and mandated that ownership must be disclosed. All investors acquiring mortgage loans are now required to provide the consumer with the name, address, and telephone number of the new owner, and the transfer date. They’re also required to provide the homeowner with the name, address, and telephone number of the party who is authorized to receive the mortgage loan payments.

However, most homeowners still don’t know who owns their loans – especially if ownership was transferred prior to January 1, 2011. But don’t worry. This is a detail that experienced San Diego Short Sale agents will ferret out for you.

But if I’m asking for approval to short sale my home, why does it matter who owns my loan?

Because knowing which bank or entity actually owns the loan is vital to short sale negotiations.

Each investor has its own guidelines regarding the selling price they’ll accept for a short sale relative to their own appraisals. Experienced short sale negotiators take the time to learn those guidelines so they can negotiate more effectively with the bank’s asset managers.

Successful San Diego short sale agents:

  1. Develop a working relationship with asset managers / short sale negotiators at each of the banks that handle mortgage loan portfolios for investors
  2. Know each investor’s guidelines
  3. Negotiate from a position of knowledge

We’ve kept hundreds of San Diego area homeowners out of foreclosure since this crisis began. We’d like to do the same for you, so if you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and are thinking about a short sale, get in touch.

You have short sale questions; we have answers.


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

San Diego Short Sale Success is Often Determined by the Initial Application

Almost any conversation about real estate these days includes a story or two about a San Diego short sale that drug out for 6, 8, or 12 months before closing. Some stories are even worse – they tell of short sales that were rejected after the bank sat on the paperwork for up to 6 months.

The stories are true, but it isn’t likely to happen that way if the listing agent has both expertise and experience with San Diego short sales.

Sometimes the bank’s asset managers are simply slow or inefficient, but more often the delays and problems can be traced back to the San Diego homeowner and his or her listing agent.

It’s all a matter of procedure – and submitting the request properly the first time.

If you want to gain the asset manager’s cooperation, you submit everything they want in a package with the initial short sale request. That makes the asset manager’s job easier – and when you make anyone’s job easier, you set yourself up for a good working relationship.

If you fail to submit the required paperwork, your request will go to the bottom of the stack, and it could be weeks or even months before you get notification about the missing items. Naturally, the negotiation won’t start until the bank has everything it wants.

Over the past several years,we’ve had a 98% success rate in selling and closing the San Diego short sales we list. One reason for that success is that we’ve taken the time to learn what each of the major banks wants in the initial short sale request package. We make sure it’s all there, with the pages arranged in the specified order. In other words, we set the stage for success with the initial contact.

If you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and are considering a short sale, call 619-929-1413 or write td@tomdunlap.com. We’ll be happy to explain the process and answer your questions – at no obligation, of course.


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 buy back the house I’m short selling?

Many San Diego homeowners would like to remain in their homes – but with a considerably lower mortgage payment and a smaller loan balance.

Thus the question arises: Can a seller buy back the house he is short selling? The answer is “Probably not.” In fact, most lenders will not allow you to sell to a relative, a close friend, or a business associate.

Most San Diego short sale contracts require both the buyer and the seller to certify that theirs is an “arms length” transaction.

What is an “arms length” transaction?

According to the Dictionary of Banking terms, an “arms length” transaction is: “A transaction carried out by unrelated or unaffiliated parties, as by a willing buyer and a willing seller, each acting in his own self-interest. Pricing based on such transactions is the basis of fair market valuations.”

If you were to purchase the house yourself or to sell it to someone close to you, the bank might assume that they weren’t getting the highest possible price for the house. And of course, the highest possible price is their goal.

However, while we have not witnessed it, we have been told that some banks will approve a non-arms length transaction if it appears to be in the bank’s best interests. Thus, it can’t hurt to ask. Just don’t be surprised when the answer is “no.”

Depending upon your bank and its policies, you may be able to refinance with a principal reduction or to work out a loan modification.

If a loan modification is your choice, do come and see us before making application.

We have the same software that the banks use to determine whether or not you’re qualified – and we can tell you within minutes what it might take weeks or months to learn from the bank. If it does appear that you qualify, we can also give you information on how to present your case in a manner that gives you the best chance of success.

If neither a refinance nor loan modification will work, list your home as a short sale, get it sold, and move on with your life. The sooner you make the decision the sooner you’ll be out from under the burden of high payments. Then, in just 2 or 3 short years, you’ll be eligible to purchase another San Diego home.

If you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego, and want to put it on the market as a San Diego short sale, we can help. We’ll be glad to answer your questions and explain how a short sale is transacted.

We are short sale specialists. We’ve been successfully handling San Diego area short sales for the past 9 years, with a 98% success rate. We’d be pleased to help you too, so feel free to call with any 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.

Who decides which short sale offer to accept? The Homeowner.

The Homeowner decides which offer to accept.

Because the seller’s lender has to approve a short sale, many believe that it is the lender who sees all the offers and decides which to accept. That’s not true. It’s just one of the misconceptions that’s been repeated so often that people have come to believe it.

As long as no foreclosure has been finalized, the homeowner still has the right to accept or reject any offer to purchase his or her home. The lender’s asset manager simply approves or rejects that offer after your agent submits it.

It is the San Diego homeowner who chooses the listing agent and sets the listing price, based on advice from his or her short sale listing agent. When the listing agent is experienced in San Diego short sales, that listing price will fall within a range that’s acceptable to the lender.

It is also the homeowner who chooses which offer to submit to their lender for approval.

A San Diego homeowner may reject any offer – for any reason.

San Diego homeowners aren’t obligated to entertain offers far below market value, and can in fact reject an offer simply because the buyer “rubbed them the wrong way.” It is still their house.

Unfortunately, some San Diego home buyers and their agents don’t understand this. Some believe that the homeowner must accept any offer and submit it to the lender.

Most of the time, homeowners have good reasons for rejecting an offer. Those reasons include:

  • Price: Your agent has advised you that the bank won’t approve an offer below a certain number, and this offer is lower.
  • The buyers want expensive repairs – and you don’t plan to spend any more money on the house.
  • The buyers have included excessive contingencies – a sure sign that they’ve probably submitted multiple offers and could decide to walk.
  • The buyers have not gotten a loan pre-approval – so you don’t know that they could actually close.
  • The buyer has not put down enough earnest money to make you feel that he or she is serious and they refuse to increase it.

If you are underwater with a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and are thinking of short selling, get in touch.

You can reach us by calling 619-929-1413 or writing td@tomdunlap.com.

As San Diego Short Sale specialists, we have helped hundreds of homeowners avoid foreclosure over the past 9 years. In fact, we have maintained a 98% success rate in getting our short sales closed.


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.

Beware of Loan Modification Scams

As most San Diego homeowners know, loan modifications did not turn out to be solution that was promised.

A program that was supposed to give aid to more than 3 million troubled homeowners across the U.S. within the first year has instead, after several years, helped only about 600,000 homeowners nationwide.

So, while we know that most loan modifications fail – or end in foreclosure for San Diego homeowners – the slight chance of success gives hope to some who desperately want to keep their homes.

As a result, troubled homeowners have become the latest “easy target” for con artists. These con artists run crooked companies that promise that for an up-front fee, they’ll handle all the paperwork, details, and follow-up – and the homeowner will get a loan modification.

The truth is, many of these companies don’t even attempt to help the homeowners. They simply take the fees, which can range from $750 up to nearly $4,000. Even worse, they advise the homeowners to stop making payments – a move that almost guarantees foreclosure.

Some of these companies have been shut down and fined. Others are still in operation and still fleecing homeowners when they can least afford it.

If you are considering a loan modification on your San Diego home, please realize that you will be your own most effective negotiator. However, there are things you need to know before you start the process. The first is whether your payments, income and assets fall within your bank’s guidelines for loan modification.

If they don’t, the bank will take your application and let you wait for several months before they send you a rejection notice. By then you will have wasted precious months when you might have been considering other alternatives – such as offering your home as a San Diego short sale in order to avoid the stain of foreclosure.

Talk to us first…

Before you apply for a loan modification, call Tom Dunlap and make an appointment to come in and talk. We have obtained the software and the guidelines that will enable us to tell you within minutes whether your San Diego loan modification application will even be considered.

If the answer is yes, we can explain some things that the banks won’t tell you. For instance:
• How to write an effective hardship letter
• The 3 most common loan modification mistakes – and how to avoid them
• What not to do so you don’t risk being carted off to jail
• How to calculate and present your budget properly to increase your chance of success

If the answer is no, We’ll be happy to explain how you can still avoid foreclosure through the short sale of your San Diego home.

And yes, when considering foreclosure versus short sale, a short sale is the far better choice.

Over the past 9 years, Tom has successfully helped hundreds of San Diego area homeowners avoid foreclosure through short sales. In fact, he has a 98% success rate. He can do the same for you – as long as you don’t wait too long to ask for assistance.

So if you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and are contemplating either a loan modification or a short sale,call 619-929-1413 or write td@tomdunlap.com to tell us your situation. We’ll be happy to help you determine whether you’ll be eligible for a loan modification, explain the real estate short sale process, and answer your questions about both the benefits and consequences of a short sale.


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.

Why Won’t My Agent Show Me Short Sale Listings?

More and more San Diego buyers’ agents are steering their buyers away from short sales. One lady who called on us to show her our short sale listings asked why her former agent refused.

With short sales making up a good portion of the inventory, she felt that she was narrowing her choices and probably missing out on some bargains. And of course, she was.

Buyer agents who know short sales are always willing to show our short sale listings.
The first reason many buyer agents steer clients away from short sales is that the client has indicated a need to purchase and close in a short time frame. In that case, the buyer should avoid short sale listings. No matter how skilled the listing agent happens to be, a short sale takes longer than a traditional sale, simply because it requires approval from so many people.

Depending upon the bank’s procedures, an experienced short sale agent can usually gain approval within 30-90 days. With an inexperienced listing agent it could take 6 months or more.

Getting approval from a homeowner can take only a day or two.

Next, the San Diego buyer’s agent in question may have had a bad experience.

She may have submitted a short sale offer on a home listed by an agent who didn’t submit the short sale request properly, or who didn’t follow up. Or, perhaps the listing agent was a poor negotiator. Or, perhaps the buyers’ agent didn’t understand his or her duties in the short sale process.

The number of problems that inexperience can cause are what lead us to say “Always use an experienced short sale agent.”

However, all of us had a first short sale, so we don’t want to bash anyone for jumping into something new. An inexperienced agent can do well if they have an experienced agent as a mentor to give assistance and advice as they go through the process the first few times.

Although no one can predict what the banks will do in each new transaction, we who specialize in San Diego short sales are careful to study each bank’s policies and procedures so that we can price our listings correctly and present an acceptable package the first time. Knowing what each lender wants and expects also enables us to negotiate from a strong position.

If your agent refuses to show you San Diego short sales, ask why. If you have time restraints, then your agent is correct. You should avoid them. But if the reason is your agent’s prior bad experience with short sales, ask him or her to only show you San Diego short sales listed by agents who specialize in short sales and have an outstanding track record for closing.

If you’re a buyer looking for an agent to guide you expertly through a short sale purchase, call 619-929-1413 or write td@tomdunlap.com to tell us your wants and needs. We’ll be pleased to do a search on your behalf.

We specialize in San Diego short sales – and we’ve successfully sold and closed 98% of our listings over the past 9 years.

We’ll be happy to show you our current short sale listings. And if you’re already working with a buyer’s agent, we’ll be pleased to cooperate with that agent to help you own the home of your dreams. Ask your agent to get in touch with us.

If you have questions about the short sale process and how it differs from purchasing a non-distressed San Diego home, please do call us at 619-929-1413 or write td@tomdunlap.com. We’ll be happy to 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.

Can I Ever Own Another Home After a San Diego Short Sale?

Yes, you can own another home after a San Diego short sale. The short sale of your home does not mean becoming a tenant for life.

In fact, with careful money management, you can own another home just 2 or 3 short years after a San Diego short sale.

So that you’ll be ready, use this time to rebuild your credit scores and put some money away for a down payment.

Step #1: Pay down your other bills.

If you have other debts, and especially debts in arrears, start working to get them repaid. A “paid late” notation on your credit report looks better than a write-off or a judgment.

Check to see that you were cleared of all liability for your San Diego home loan when your short sale was finalized. If there’s a “deficiency judgment” against you, contact your lender and attempt to negotiate a pay-off for an amount less than you owe. Quite often, they will.

If Tom Dunlap helped you short sale your house, or if you sold after the new California laws regarding deficiencies went into effect, this should not be an issue.

Step #2: Check your own credit, even if you think you know what the report says

Order a free copy of your credit report from each of the major credit reporting bureaus. The bureaus are: Equifax, Experian, and TransUnion. Pay the extra few dollars to see your credit scores. Do get a report from all 3 bureaus, because they will probably not be exactly alike. Because it does cost money for businesses to report, some report to one bureau and not to the others.

Read the reports carefully to see that everything on them is true. Even the executives at FICO admit that over 70% of all credit reports contain errors. And while some are minor and can be ignored – such as a slight misspelling of your name – some of those errors can be damaging. All it takes is a keystroke error to put someone else’s debt on your credit report.

Watch for signs of identity theft, such as notice that you’re working for a new company, have a different spouse, or live at an address that isn’t yours. If you find such signs, contact the credit bureau and follow their advice.

If you find negative information that’s more than 7 years old, take steps to have it removed. The credit bureaus have forms for this purpose.

Step #3: Work on reestablishing your credit.

Become fanatic about paying every bill on or before the due date. As long as no new negatives are reported, time alone will repair your credit. You want to see those “Paid as agreed” notations on your credit report.

Keep your old credit cards and use them – but sparingly. The longer you’ve had credit with a given card company, the more positive influence it has on your credit scores, so don’t cancel any old cards and don’t stop using them entirely. Charge something every few months, then pay the bill when it arrives.

If you’re carrying credit card balances, work to bring them each down to 30% or less of the credit lines available to you.

Credit issuers like to see that you can handle more than one type of credit. So unless you already have them, apply for a small car loan or other fixed-payment installment loan. If you no longer have a credit card, go on line to research, find one that fits, and make application.

If your credit really suffered before your short sale, you’ll begin getting “bad credit” credit card offers in the mail. Before you choose one be sure to compare offers. There are HUGE differences. Some have initial fees almost equal to the credit lines they offer – and some have interest rates as high as 75%!

Apply for only one card. If you apply for several within a short period, it will signal that you’re desperate for funds and your scores will drop.

Once you have a new credit card, never use more than 30-40% of your credit line and always pay it down below 30% before the next billing cycle.

Step #4: Avoid Scams

Credit repair ads promising to rid your credit report of all negative information are scams. The only thing they’re going to remove is money – from you. In addition they could get you into legal difficulties, because some of the credit repair methods they promote are fraudulent.

What they can, but probably won’t, do is remove outdated or untrue information. And you can do that yourself by contacting the credit bureaus directly.

Legitimate debts, judgments, etc. cannot be removed by any legal means. They will, however, come off over time. You simply need to be patient and work on adding positive information to your credit report while the negative information fades into the past.

You can own another San Diego home. It will just take a little time and some careful money management.

If you aren’t sure whether you’re now qualified to purchase a new San Diego home, get in touch. We’ll be happy to discuss your situation and give you the benefit of our experience.

If you’re still just thinking of offering your home as a short sale, and wondering if you should or you shouldn’t, call 619-929-1413 or write td@tomdunlap.com to get advice and straight answers from Tom Dunlap – San Diego’s top short sale specialist.


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.

Divorce – what to do with the house?

One of the questions that must be answered in divorce is “What do we do with the house?”

If you’ve needed your combined income to maintain the payments on your San Diego home, neither of you can handle it alone, so you’re forced to make a decision.

One choice is to keep the house and rent it out to cover the payments. Another is for one of you to remain in the house and rent a portion of it to assist with payments. However, renting does come with its own problems. One is compromising the tax status. The other is dealing with tenant issues such as collecting rents and performing “fix-up” duties after a tenant moves out. Your neighborhood zoning may also be a factor.

The other choices are selling or letting the house go into foreclosure.

Selling your San Diego home is always the best option.

If you have equity in the home, this is obviously the easiest and best solution. But even if your San Diego home is “underwater,” selling as a short sale is not only possible but will be more beneficial to both of you.

*Should you short sale or shouldn’t you? Call 619-929-1413 or write td@tomdunlap.com to get advice from San Diego’s top short sale specialist, Tom Dunlap.

When You Let Your San Diego Home Go Into Foreclosure…

At first glance, this might sound like a good option. One of you can remain in the home without making payments until a foreclosure is final. With many lenders taking a year or even longer to complete a foreclosure, that would give you breathing space and time to put away some funds before needing to find a rental. At the very least, you’ll have about 6 months from the time you make the last payment.

But this option does have drawbacks. First, it will severely damage your credit scores and thus your ability to rent or buy a home in the future – and even your ability to get a job. And unless only one of you signed the mortgage documents, this damage will apply to both of you.

It doesn’t matter if the divorce decree gave the house to one spouse. What matters is whose signature is on the mortgage loan application(s).

Next, if you have a home equity line of credit, the second lien holder can sue you and obtain a deficiency judgment. And, just as everyone’s credit scores will suffer, this judgment will obligate anyone whose name is on the application.

Finally, if you allow your house to go into foreclosure, you’ll both be ineligible for a new mortgage loan for from 5 to 7 years.

Good reasons to choose a San Diego short sale instead

Your credit scores will take a smaller hit and notice of the short sale will “fall off” your credit report in seven years rather than ten.

The time before you can get a new loan will also be shorter. After the short sale of a home, if you meet the other qualifications, you can get a new mortgage in as little as 2 years.

Short sale consequences are far less severe than the consequences of a foreclosure…

So if you own a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, or Metro San Diego and are facing divorce and loss of income, think seriously about a short sale.

Call 619-929-1413 or write td@tomdunlap.com to ask your questions and tell us the situation. We’ll give you straight answers.

First, we’ll be happy to help you determine whether you do have equity in today’s market. Then, if you need to short sale your house, we’ll explain the real estate short sale procedure and answer all your questions.

We specialize in San Diego short sales and over the past 9 years have maintained a 98% success rate in getting short sales closed. So get in touch. We’d like to help you avoid foreclosure, too.


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.

Are the Banks Negligent, Indifferent, or Inefficient?

Whatever they are, their actions all too often spell financial loss for San Diego homeowners.

Here are 3 ways that loan servicers and asset managers are keeping some San Diego homeowners in distress.

1. Asset managers routinely delay their response to short sale requests.

Most San Diego home buyers want a “yes or no” answer within a few days of making an offer to purchase, but when they attempt to purchase a home in short sale status, they’re forced to wait. In fact, agents report waiting 6 months or even more just to get a yes or no.

The result: Many homeowners go into foreclosure while a ready, willing and able buyer stands ready to purchase.

The second result: Buyers withdraw their offers when their patience runs out. They made the offer because they wanted a home – so they move on and choose one that’s readily available. We can hardly blame them for that.

Those who are willing to wait for an extended period of time expect a bargain in return for their patience, and we can’t fault them for that, either.

This delay in responding to short sale requests causes many San Diego buyers’ agents to avoid showing short sales. It’s much easier to get an answer after a home becomes a bank-owned foreclosure.

Why do loan servicers delay response? Is it inefficiency, negligence, or indifference?

If banks wanted to protect their investors and help the real estate market rebound, they would make the short sale approval process as fast as possible. And they could. They could, but so far all they do is talk about it.

They could begin the property valuation process just as soon as they get the short sale request. They could also inject some common sense. After handling dozens of foreclosures and short sales in a given area, they should know market values. If homeowners knew the bank’s “bottom line” they wouldn’t waste time considering offers that were sure to be rejected.

* Should you short sale or shouldn’t you? Call 619-929-1413 or write td@tomdunlap.com to get advice from Tom Dunlap – San Diego’s top short sale specialist.

2. Banks routinely reject loan modifications that would prevent foreclosures and preserve neighborhood values.

While a few homeowners have been granted loan modifications, more have been refused. You’ll find no shortage of stories about homeowners who spent months submitting paperwork before being denied. Others have been granted trial modifications and faithfully made payments, then been denied.

And the guidelines are both unclear and conflicting. One representative tells the homeowner they must be in arrears to be considered – another tells them they must not be in arrears.

Many who “do not qualify” are wondering why. One woman I spoke with said “We’ve been managing not to get behind with our payments at $1,700 per month. But the bank says they’re denying our modification because we can’t afford $1,100 per month. Does this make sense?”

The result: Homes in foreclosure that could have been saved and neighborhood values dropping because of the presence of vacant homes.

Is it deliberate negligence, indifference, or inefficiency?

4. Banks that repossess San Diego homes simply don’t get them on the market in a timely fashion, and don’t maintain those homes while they stand vacant. And as we all know, vacant homes or poorly maintained homes bring down neighborhood values even as they erode the value of the house in question.

Is this because they simply have too many homes to deal with? Is it an intentional delay because they don’t want to flood the market with repossessed homes? Or is it because they have failed to develop efficient ways to streamline their processes?

Whatever the reason, entire neighborhoods have been damaged by the banks’ failure to act in a timely manner.

The good news for San Diego homeowners and short sale buyers is that we have developed systems and relationships with loan servicers that get our short sale requests pushed to the “front of the line.”

We can generally get an answer within 60 days or less, and because we know how to present our short sale requests and negotiate with the banks, that answer is usually “yes.” In fact, we have a track record of 98% success in closing our short sales.

No two short sale 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.

And if you already know you want to short sell your home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego, or if you’d like to purchase a short sale, get in touch.

We’ll be glad to explain the short sale process, tell you what you can expect as a buyer or as a seller, and show you why we get good results while so many who attempt short sales fail.

We look forward to talking with you… so get in touch and we’ll set a time to get together.


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.

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.

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 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.

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.

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 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.”