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Follow on Google News | Selling House Back To Bank - Can I Give My House Back to the Bank?Foreclosure rates are continuing to climb. Nevada and California have posted the highest foreclosures, based on per capita and total, respectively.
By: Real Estate Expert Foreclosure rates are continuing to climb. Nevada and California have posted the highest foreclosures, based on per capita and total, respectively. Other statistics show that in Detroit, there is one foreclosure for every 51 households. Such a startling number is five times the national average. In times like these, many people resort to asking the obvious question: can I simply give my home back to the bank? Such a return is called a "Deed in Lieu of Foreclosure." If you do have equity in your house, it would be wise to list the property and go for the quick sale. Across the country, houses are being listed well below market price and many are not selling. Depending on your situation, you may have a "long winded" quick sale. This is the case for a California couple who listed their home $100,000 below appraisal price. They then lowered it three times to $200,000 below appraisal. Six months later, they are still waiting for their first bite. Before you say all of your farewells to the neighborhood, look into a "Deed in Lieu Foreclosure." In terms of the technicalities, there must be a total consideration equal to or exceeding the fair market value of the property being returned to the lender when any settlement agreement is entered into to. Again, most lenders are not interested in a property that is worth less than what is owed-or if more is owed on the property than the actual fair market value of it. A "Deed in Lieu of Foreclosure" One major upside to the whole process is that it will be over sooner than later. It will be done and dealt with and the foreclosure will be behind you. Your credit report will have fewer late payments listed. With all of this in mind, it will easier for you to bounce back from this trying experience. If a foreclosure is all but inevitable, giving the house back to the bank is an idea that should definitely be considered. The house is practically out of your hands anyways; why not place yourself in a better position to recover emotionally and financially. The idea is to make the damage as minimal as possible. Get Internet #1 - Selling House Back To Bank @ http://realestatecure01.webs.com and change your financial life forever! Two Advantages Are: 1)You are released from some, if not all, of the debt of your defaulted loan. 2)You avoid the public scrutiny involving newspaper listings, legal notices posted on your front door for all to see, an intimidating court appearance and a formal sheriff eviction. The Down Side Of Foreclosure Giving your house back to the bank to effectively stop the foreclosure process is a means to an unfortunate end. 1099C Cancellation of Debt Here is some fine print for you. If you borrow money from a lender for a home and you give that home back as a "Deed in lieu of a Foreclosure," When you initially borrowed the money from the lender, you were obligated to claim the given amount as income because you agreed to pay that amount back. However, you are no longer contractually bound to repay the amount and the original loan sum is reportable as you are no longer making payments. The lender is also obligated to report the forgiven loan amount to both you and the IRS in what is called a 1099C form, or a Cancellation of Debt. Here's a straightforward illustration of a situation involving a 1099C. You borrow $15,000 from a lender and you default after paying $5,000. If your lender cannot collect the remaining $10,000 from you and it is cancelled, it becomes your taxable income. There is an exception to every rule. Cancellation of debt income is not always taxable. Debts forgiven due to bankruptcy are not considered taxable income to the financial circumstances. Also, you cannot deduct the loss if from the foreclosure or sale or sale of your property you lose money. A "Deed in Lieu of Foreclosure" # # # How come everyone is earning from Real Estate? Want to get rich during the Downturn? Get Internet #1 - Selling House Back To Bank @ http://realestatecure01.webs.com and change your financial life forever! End
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